Renewal guide

Texas renewal notice rules, in plain English

Your carrier owes you written notice before a rate increase takes effect, and it can’t rush your answer. Here’s what the Texas Insurance Code says, section by section, and what it leaves out.

The Renewal Control Plan is for employers with 100 or more employees.

See the 120/90/60/45 day calendar See a sample Plan Report

Short answer. In Texas, an insurer has to give the policyholder written notice of a group health rate increase, with the amount and the effective date, at least 60 days before it takes effect. It can’t require you to respond before the 45th day after that notice (Texas Insurance Code §1254.001). A plan change at renewal needs 60 days’ notice too (§1501.108). These rules cover insured plans. Level funded and self funded plans renew on their own contract terms.

What the law requires

Texas Insurance Code §1254.001 covers group health policies delivered or issued in Texas. Before a premium increase takes effect, the insurer has to tell the policyholder in writing:

  • the amount of the increase, and
  • the date it takes effect.

That notice is due at least 60 days before the effective date. An HMO owes the same notice on group charges.

Two more lines in the same section matter to whoever runs the numbers:

  • You can’t be rushed. The insurer can’t require you to respond or take renewal action before the 45th day after the notice.
  • The letter isn’t the last word. The insurer can still negotiate benefits or rates at your request after the notice goes out.

The other Texas notice rules for large employer plans

Texas counts you as a large employer if you averaged at least 51 employees on business days in the prior calendar year (§1501.002). For those plans:

  • Renewal is your option. The carrier can refuse to renew only for reasons the law lists, like unpaid premium, fraud, or breaking the plan terms (§1501.108(a)).
  • Plan changes at renewal: allowed only if they apply the same way to every large employer on that plan, with 60 days’ notice (§1501.108(d)).
  • Dropping a type of coverage: 90 days’ notice, plus an offer of the carrier’s other coverage (§1501.109(d)).
  • Leaving the large employer market in Texas or an area: 180 days’ notice (§1501.109(a)).
  • Cancelling or not renewing for a reason the law allows: 30 days’ notice, with the reason in writing (§1501.110 and §1501.111).

Small employers (2 to 50) have their own 60-day rule, which adds a table with the old premium, the new premium and the percentage change (§1501.216).

What the notice doesn’t give you

The letter tells you the new number. It doesn’t tell you why. For that:

Level funded and self funded plans

These sections are written for insured group policies. If your plan is level funded or self funded, the renewal runs through the stop-loss contract and the administrator agreement. Ask for the renewal date and the notice terms in writing, and put them on your calendar. Stop-loss basics for 100 to 500 employees.

Questions people ask

How much notice does a Texas employer get before a group health rate increase?

At least 60 days, in writing, stating the amount of the increase and the date it takes effect (Texas Insurance Code §1254.001(b)).

Can my carrier make me accept the renewal right away?

No. Under §1254.001(g), the insurer can’t require you to respond, renew, or take other renewal action before the 45th day after the notice.

Can I still negotiate after the renewal letter arrives?

Yes. The same section says the notice doesn’t stop the insurer from negotiating a change in benefits or rates at your request.

Can the carrier change my benefits at renewal?

Yes, if the change happens at renewal, applies the same way to every large employer on that plan, and you and the Commissioner get notice at least 60 days before it takes effect (§1501.108(d)).

Do these rules apply to a level funded or self funded plan?

Not in the same way. They’re written for insured group policies. A level funded or self funded plan renews through its stop-loss and administrator contracts, so the notice terms are whatever those contracts say. Ask for them in writing.

Is this legal advice?

No. It’s a plain-English walk-through of the statute. Have your own counsel read the sections that matter to you.

I built and sold a health insurance agency: grew it to 60 agents in about 3 years, then sold it. Licensed insurance agent since 2014: Texas license 2501238, NPN 17369817.

Sixty days is the legal floor, not a plan.

If the renewal letter is the first time anyone looks at the plan, you’re on the carrier’s calendar. The Plan Report reads the plan from the carrier’s own data before the renewal lands.

See the 120/90/60/45 day calendar See a sample Plan Report

Questions first? Email aloha@mattragudo.com or book a 30 minute call.

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