Texas health insurance laws combine state statutes enforced by the Texas Department of Insurance (TDI) with federal Affordable Care Act (ACA) requirements. Together they set what your plan must cover, cap what you can be charged for out-of-network emergencies, control how quickly insurers must pay claims, give you a right to appeal denials, and require larger employers to offer affordable coverage. Where state law is stronger, it applies; where the ACA is stronger, federal rules control.
What Your Plan Must Cover
The ACA sets a floor of ten essential health benefits and bars insurers from denying coverage based on pre-existing conditions. Texas adds its own mandates on top of that floor for fully insured plans. Self-funded employer plans are governed by federal ERISA rules and generally do not have to follow the state mandates.
Group health plans that cover pregnancy-related procedures must also cover in vitro fertilization. The statute does not restrict this to married couples, though an insurer with religious objections can opt out after notifying TDI and disclosing the exclusion to policyholders.1State of Texas. Texas Insurance Code Chapter 1366 – Benefits Related to Fertility and Childbirth Health plans must also cover medically necessary hearing aids, cochlear implants, and related services for children.2State of Texas. Texas Insurance Code Chapter 1367 – Coverage of Children Other required categories include diabetes treatment and supplies, mammograms, childhood immunizations, certain cancer screenings, and FDA-approved prescription drugs that are medically necessary for chronic conditions. Texas Insurance Code Chapter 1369 separately addresses prescription drug coverage for serious mental illness.3State of Texas. Texas Insurance Code Chapter 1369 – Coverage for Certain Mental Health and Substance Abuse Treatment
Preventive Care at Zero Cost
If you see an in-network provider, most plans must cover a defined list of preventive services with no copay or deductible. That includes recommended vaccines, mammograms and colonoscopies, blood pressure and cholesterol checks, depression and HIV screening, and well-child visits. Certain preventive medications, including statins for heart disease risk, tobacco cessation products, PrEP for HIV prevention, and folic acid supplements, are also covered without cost-sharing.
Mental Health Parity
The federal Mental Health Parity and Addiction Equity Act stops plans that offer mental health or substance use benefits from imposing stricter limits on those benefits than on medical or surgical care. Copays, deductibles, visit limits, and prior authorization for mental health treatment cannot be more restrictive than the equivalent physical health rules.4Centers for Medicare and Medicaid Services. The Mental Health Parity and Addiction Equity Act The parity law does not require a plan to offer mental health benefits, but most ACA-compliant plans include them because mental health care is an essential health benefit.
A Note on Short-Term Plans
Short-term health plans in Texas are exempt from most ACA requirements. They can exclude pre-existing conditions, cap benefits, and skip essential health benefit categories. Under current federal rules they are limited to an initial term of three months with a maximum total duration of four months including renewals, and Texas requires insurers to disclose the limitations and get your signed acknowledgment before collecting any premium or application fee.5Legal Information Institute. 28 Texas Admin Code 3.3602 – Requirements for Short-Term Limited-Duration Coverage Surprise billing protections and most state coverage mandates do not apply to these plans.
Surprise Billing Protections
The federal No Surprises Act, in effect since 2022, protects you from unexpected bills when you get emergency care from an out-of-network provider, or when you are treated at an in-network facility by an out-of-network doctor you did not choose. Your plan cannot require prior authorization for emergency services, cannot charge you more in cost-sharing for out-of-network emergency care than for in-network care, and must count what you pay toward your in-network deductible and out-of-pocket maximum.6U.S. Department of Labor. Avoid Surprise Healthcare Expenses – How the No Surprises Act Can Protect You The protections cover employer-sponsored and individual market plans. They do not reach short-term health plans, standalone dental or vision plans, or retiree-only plans.7Office of the Law Revision Counsel. 42 USC 300gg-111 – Preventing Surprise Medical Bills
How Insurers Must Handle Your Claim
Unfair Settlement Practices
Texas Insurance Code Chapter 541 makes it illegal for an insurer to misrepresent policy terms, fail to reasonably investigate a claim, delay settlement without justification, or refuse to explain a denial. When liability on a claim is reasonably clear, the company must make a good-faith effort to settle promptly. Insurers also cannot force you to sign a full release when they have only made a partial payment, unless the payment reflects a genuine compromise of a disputed amount.8State of Texas. Texas Insurance Code Section 541.060 – Unfair Settlement Practices
Prompt Payment Deadlines
The Texas Prompt Pay Act requires insurers to process and pay clean claims within set windows. Electronic claims must generally be paid or denied within 30 days, and paper claims within 45 days. When an insurer misses these deadlines, it owes penalty interest on the unpaid amount, which gives insurers a direct financial reason to move claims through rather than sit on them.
Network Adequacy
Texas regulates provider networks to make sure policyholders have reasonable access to in-network care. If your plan’s network does not include enough providers in your area for a particular type of care, you may be able to see an out-of-network provider and have the visit covered at in-network rates. TDI reviews network adequacy as part of its oversight.
Appealing a Denied Claim
When your insurer denies a claim, it must give you a written explanation with the specific reasons and instructions on how to appeal. You have at least 30 days from the denial notice to file an internal appeal, and you can add medical records, letters from your doctor, or other supporting documentation during the process.9Legal Information Institute. 28 Texas Admin Code 19.1711 – Written Procedures for Appeal of Adverse Determination
The insurer must resolve standard appeals within 30 calendar days. For urgent medical situations, an expedited appeal must be completed within one working day after the insurer has all necessary information, with the decision delivered by phone or electronically and a written follow-up within three working days.
If the internal appeal fails, you can request an independent external review. For HMO plans, TDI runs the process through certified Independent Review Organizations.10Texas Department of Insurance. Request for Review by an IRO For other health plans, you ask your insurer to start the external review. Under the federal process you have four months from the final internal denial to file the request, and the external reviewer’s decision is binding on the insurer.11Centers for Medicare and Medicaid Services. HHS-Administered Federal External Review Process for Health Insurance Coverage
Filing a Complaint With TDI
If an insurer improperly denies a claim, misleads you about coverage, or engages in other unfair practices, you can file a complaint with TDI online, by mail, or by phone. Include your policy number, the details of the issue, and copies of any correspondence with the insurer. TDI can require the insurer to correct its behavior, pay overdue claims, or face penalties. The complaint is free and does not require a lawyer, and it is often the fastest path to resolving delayed payments or billing errors.
Enrollment Windows and 2026 Cost Changes
Open enrollment for individual marketplace coverage runs from November 1 through January 15. Select a plan by December 15 and coverage starts January 1; enroll between December 16 and January 15 and coverage begins February 1.12Centers for Medicare and Medicaid Services. Marketplace 2026 Open Enrollment Fact Sheet Outside that window, you can enroll only after a qualifying life event: losing coverage, marriage or divorce, having or adopting a child, moving to a new ZIP code or county, losing Medicaid or CHIP eligibility, or turning 26 and aging off a parent’s plan. You generally have 60 days from the event.13HealthCare.gov. Qualifying Life Event
The enhanced premium tax credits that ran from 2021 through 2025 expired at the start of 2026.14Congress.gov. Enhanced Premium Tax Credit and 2026 Exchange Premiums Beginning in 2026, premium tax credits are again limited to households earning between 100% and 400% of the federal poverty line.15Internal Revenue Service. Eligibility for the Premium Tax Credit Households above 400% no longer qualify for any subsidy and must repay the full amount of any advance credits received during the year. Applicable contribution percentages have also increased for 2026, so households that still qualify will owe a larger share of their premium. To claim the credit you must enroll through the marketplace, cannot be eligible for affordable employer coverage or programs like Medicare or Medicaid, and cannot file taxes as married filing separately.
Keeping Coverage After a Job Ends
Federal COBRA rules require businesses with 20 or more employees to let departing workers keep their group health coverage for up to 18 months. You pay the full premium plus a 2% administrative fee.16Texas Department of Insurance. Termination – COBRA and State Continuation
Texas continuation coverage picks up where COBRA does not reach. If your employer had fewer than 20 employees, you and your dependents can stay on the group plan for up to nine months. If you have already used the full 18 months of COBRA, Texas law adds up to six months beyond that. You pay the full premium in either case. State continuation applies only to plans issued by insurance companies and HMOs regulated under the Texas Insurance Code, not to self-funded employer plans.
What Employers Must Do in 2026
Businesses with 50 or more full-time employees, including full-time equivalents, are applicable large employers under the ACA and must offer health coverage to at least 95% of their full-time workforce. The plan must meet minimum value, covering at least 60% of expected medical costs, and be affordable to the employee.17Internal Revenue Service. Affordable Care Act Tax Provisions for Employers
For 2026, coverage is affordable if the employee’s required contribution for self-only coverage does not exceed 9.96% of household income.18Internal Revenue Service. Revenue Procedure 2025-25 Because employers rarely know household income, the IRS allows three safe harbors: W-2 wages, hourly rate multiplied by 130 hours per month, or the federal poverty line.
Employers that fail to offer any qualifying coverage face a penalty of roughly $3,340 per full-time employee per year, minus the first 30 employees. Employers that offer coverage that is either unaffordable or fails minimum value face a penalty of roughly $5,010 for each employee who receives a marketplace premium tax credit instead.19Internal Revenue Service. Employer Shared Responsibility Provisions These figures are indexed annually and represent a noticeable increase from prior years.
Businesses with fewer than 50 full-time employees are not required to offer health insurance. If they do, they must follow Texas insurance rules and cannot selectively offer coverage to some workers while excluding others in the same job category. Small employers may qualify for a federal tax credit worth up to 50% of premiums paid for employee coverage, or 35% for tax-exempt organizations, available for two consecutive tax years and conditioned on buying coverage through the Small Business Health Options Program.20Internal Revenue Service. Small Business Health Care Tax Credit and the SHOP Marketplace
When to Bring in a Lawyer
Most routine coverage disputes get resolved through the internal appeal, external review, or a TDI complaint. Legal representation becomes worth considering when an insurer engages in bad faith: repeatedly delaying payments, misrepresenting what your policy covers, or denying claims that are clearly supported by the policy. Under Texas law you can sue for breach of contract, for violations of the Insurance Code’s unfair practices provisions, and under the Texas Deceptive Trade Practices-Consumer Protection Act. Available remedies include the unpaid claim amount, up to treble damages for knowing or intentional misconduct, mental anguish damages, and attorney’s fees.21State of Texas. Texas Business and Commerce Code Chapter 17 – Deceptive Trade Practices
Employers may need counsel for ACA compliance problems. Failing to offer affordable coverage, mishandling continuation notices, or applying eligibility rules inconsistently can trigger IRS penalties and employee lawsuits, and the stakes climb quickly when the issue reaches an entire workforce rather than a single claim.