Texas Senate Bill 1332 to amend limitation on retro premium waivers

On May 31, 2025, the Governor of Texas, Greg Abbott, signed Senate Bill (SB) 1332. The legislation, which became effective immediately, amends SB 51 enacted in 2006. SB 51 prohibits retro-terminations of plan enrollees.

Below is a summary of how SB 1332 impacts carrier compliance with SB 51. It outlines when carriers may grant a request to waive premiums, and in certain circumstances, prohibits carriers from granting policyholder requests for premium waivers. Also covered is the application of SB 1332 to UnitedHealthcare (UHC) and Surest fully insured group policy provisions.

The guarantee of coverage and retro-termination prohibitions of SB 51 apply to Texas residents who are enrollees in fully insured, employee-provided group plans (HMO and PPO) sitused in Texas. Customers and carriers must comply with its key requirements:

• SB 51 states that plan enrollees are entitled to coverage through the end of the month during which the plan sponsor/contract holder notifies the carrier/health maintenance organization (HMO) that an enrollee’s coverage has been terminated.

Delays by the policyholder to notify the carrier of an enrollee’s termination requires that the enrollee’s coverage be extended, and that the policyholder be billed for each month, until the carrier is formally notified of the enrollee’s effective date of termination.

SB 1332 amendments to SB 51 give carriers the flexibility to waive the employer’s liability for premiums, but with limitations.

If the group contract holder notifies the carrier/health maintenance organization of the termination of an enrollee’s eligibility for coverage later than the end of the month in which the enrollee’s eligibility for the group coverage is terminated, the carrier/health maintenance organization may waive the contract holder’s liability for premiums on the enrollee for any subsequent months, provided that no covered services were provided to the enrollee after the end of the month in which the enrollee’s eligibility terminated.

SB 1332 has two key provisions:

1. SB 1332 prohibits the carrier from waiving premium for any month during which covered services were provided to the terminated plan enrollee (including their dependents), after the effective date of the plan enrollee’s termination.
2. SB 1332 does not mandate but rather gives carriers the flexibility whether to waive the policyholder’s liability for premiums caused by the policyholder’s delayed communication of an enrollee’s termination when the enrollee has not received covered services. 

To date, the Texas Department of Insurance has not adopted implementing regulations, which may further clarify carrier compliance with SB 1332.

UHC’s group policy provisions expressly reference clerical errors by a policyholder that result in the adjustment of premiums, which may limit retroactive requests. Premium adjustments may be made retroactively, but only for the period of time allowed under the Clerical Errors provisions of the group policy.

• Customers should refer to Section 6 of their UHC (or Surest) group policy, “What Happens When There is a Clerical Error?” for additional details.

For questions, contact your UnitedHealthcare representative or broker.