New Texas 2026 Health Benefits Mandates for Employer-Sponsored Plans
Introduction: A Legislative Milestone in Texas Health Policy
In June 2025, the Texas Legislature concluded its 89th Regular Session with sweeping reforms aimed at enhancing healthcare protections for Texans. A suite of new laws affecting employer-sponsored health insurance plans has been passed and signed by the governor. While each bill addresses a specific healthcare need, taken collectively, they reflect a concerted push toward more comprehensive, equitable and consumer-friendly benefits.
Effective for plans issued, renewed, or delivered on or after January 1, 2026, most of these statutes introduce new requirements for insured medical plans domiciled in Texas. They also impose regulatory obligations on pharmacy benefit managers (PBMs) operating in Texas, unless specified otherwise. This reform package touches on key areas—from newborn coverage and telehealth parity, to pharmacy transparency and artificial intelligence oversight—shaping the future of employer-sponsored health plans in significant ways.
Below is a detailed breakdown of each relevant law, with insight into the implications for employers and plan sponsors.
1. Expanded Automatic Enrollment for Newborns — Senate Bill 896
What It Does:
SB 896 extends the automatic enrollment period for newborns, increasing it from 31 to 60 days following birth. Coverage continues through day 61 unless the insurer receives birth notification and the additional premium by day 60. It also strengthens newborn coverage protections, prohibiting exclusions for congenital defects or mandatory screening tests during this initial period.
Effective:
Immediate upon signing – Sept 1, 2025 – but applies only to plans delivered, issued, or renewed on or after Jan 1, 2026.
Implications for Employers:
Gives parents more breathing room to complete enrollments.
Employers should update communication materials (e.g., plan summaries) to reflect the extended window.
Cafeteria plans must be amended by December 31, 2025 to accommodate this change for 2026 plans.
2. Uniform Coordination-of-Benefits Questionnaire — House Bill 388
What It Does:
HB 388 mandates the Texas Department of Insurance (TDI) to work with stakeholders to develop one standardized Coordination-of-Benefits (COB) questionnaire. All health benefit plan issuers must use it whenever COB applies. This change is intended to reduce administrative waste, minimize confusion, and lower the risk of billing errors.
Effective:
Rules must be adopted by Jan 1, 2026.
Use of the questionnaire is required starting Feb 1, 2026.
Implications for Employers:
Although primarily impacting issuers, employers should be prepared for streamlined COB processes.
Plan administrators should be briefed on the upcoming change to ensure smooth implementation.
3. Telehealth Equality Across State Lines — House Bill 1052
What It Does:
HB 1052 requires that health plans cover telemedicine, teledentistry, and telehealth services provided from outside Texas on the same terms as in-state services—as long as the patient resides primarily in Texas and the provider is licensed and has a physical Texas office.
Effective:
Applies to plan periods beginning Jan 1, 2026 and later.
Implications for Employers:
Telehealth access becomes more flexible, especially for remote or mobile employees.
Employers should update vendor agreements and internal policies to reflect cross-border telehealth parity.
4. Voluntary Risk-Based PCP Contracts — House Bill 2254
What It Does:
HB 2254 permits insurers to engage primary care physicians (PCPs) or physician groups in risk-based arrangements—such as capitation or shared-risk models—but participation is voluntary. Crucially, insurers cannot penalize physicians who opt out.
Effective:
Signed on June 20, 2025; effective immediately upon enactment.
Implications for Employers:
Opportunity to partner with insurers offering more integrated care models—potentially driving cost efficiency and care quality.
Employers should stay informed about local PCP collaborations and convey options clearly to plan members.
5. Mandatory CAR T‑Cell Therapy Coverage — House Bill 3057
What It Does:
HB 3057 requires plans that already cover CAR T‑cell therapy to include coverage for medically necessary CAR T treatment administered by qualified, FDA-certified in-network providers.
Effective:
Applies to plan years starting on or after Jan 1, 2026.
Implications for Employers:
Enhances access to cutting-edge treatments for cancer patients.
Employers should verify network participation and ensure plan language reflects this requirement.
6. Onshore Data Processing for PBMs — House Bill 3233
What It Does:
HB 3233 prohibits pharmacy benefit managers from storing or processing data of Texas residents outside the United States or its territories.
Effective:
For PBM contracts entered into on or after Sept 1, 2025.
Implications for Employers:
Privacy protections strengthen, but PBMs may need to update infrastructure or renegotiate contract terms.
Employers should confirm PBM compliance with this requirement in upcoming renewals or new contracts.
7. Longer Preauthorization Exemptions & Physician Qualifications — House Bill 3812
What It Does:
Extends preauthorization exemptions from six months to a full year.
Expands the range of claims eligible for exemption consideration.
Prohibits utilization management activities from being overseen by physicians holding only an administrative license.
Effective:
Effective Sept 1, 2025, applying to plan years starting Jan 1, 2026.
Implications for Employers:
Reduces administrative burden for chronic or ongoing treatments.
Improves clinical integrity by requiring qualified practitioners in utilization oversight.
8. Gag Clause Ban in PBM Contracts — Senate Bill 493
What It Does:
PBMs may not include contract terms that prohibit pharmacists from informing patients when paying cash is cheaper than using insurance.
Effective:
For contracts entered into on or after Sept 1, 2025.
Implications for Employers:
Enhances price transparency at the pharmacy counter.
Employers should confirm that PBM agreements reflect this transparency requirement.
9. Anesthesia for Pediatric Dental Care — Senate Bill 527
What It Does:
Health plans covering general anesthesia must not exclude medically necessary general anesthesia for dental services if:
The patient is under 13, and
A documented condition prevents treatment without anesthesia, and
A qualified anesthesia provider administers it.
Effective:
Applies to plans renewing or issued from Jan 1, 2026 onward.
Implications for Employers:
Addresses pediatric access to essential dental care.
Employers should ensure anesthetic services for qualifying young children are appropriately covered.
10. Restricting AI Use in Claims Denials — Senate Bill 815
What It Does:
Insurers may not rely solely on AI or algorithms to deny, delay, or modify claims based on medical necessity; decisions must involve a physician or licensed provider. AI can still be used for administrative workflows or fraud detection.
Effective:
Goes into effect Sept 1, 2025, affecting plans starting Jan 1, 2026.
Implications for Employers:
Strengthens oversight over clinical decision-making.
Employers should demand plan transparency on AI usage policies in utilization review.
11. Swift Action Against Surprise Billing in Ground Ambulance — Senate Bill 916
What It Does:
Extends protections against surprise billing for ground ambulance services in Texas through Sept 1, 2027.
Empowers the Department of State Health Services (DSHS) to license, suspend, or revoke EMS providers engaging in deceptive payment practices for out-of-network emergency services.
Effective:
Signed June 2025; now in effect.
Implications for Employers:
Employees insured through compliant plans enjoy continued protection from exorbitant ambulance bills.
Employers should confirm emergency services billing practices in plan documentation.
12. Incentives & Network Design Flexibility — Senate Bill 926
What It Does:
Permits health plans to offer incentives—such as adjusted deductibles or cost-sharing—or to establish tiered networks that encourage use of certain providers, but prohibits limiting medically necessary services or reducing care quality.
Effective:
Goes into effect immediately upon signing in June 2025, applying to 2026 plan years.
Implications for Employers:
Employers may benefit from cost-saving incentive tools, while retaining quality safeguards.
Employer communications should clarify incentive structures and ensure no compromise on medical necessity.
13. Pharmacist Right to Reject Contract Modifications — Senate Bill 1236
What It Does:
Allows pharmacists to refuse modifications to network contracts; any changes not approved and signed by the pharmacist can be voided.
In most cases, payors may only recoup the dispensing fee, not the drug cost or other fees.
Requires health insurance cards to include a unique identifier showing whether the plan is regulated by the Texas Department of Insurance (TDI).
Effective:
Effective Sept 1, 2025.
Implications for Employers:
Empowers pharmacists and promotes contractual fairness.
Employers should ensure plan materials indicate TDI regulation status for transparency.
14. Expanded Gender Transition Coverage — Senate Bill 1257
What It Does:
Plans that have historically provided gender transition coverage must now also offer broad coverage for adverse consequences, reversal procedures, and associated follow-up or management of such treatments.
Effective:
Applies to plan years starting Jan 1, 2026.
Implications for Employers:
Enhances continuity and comprehensiveness of coverage for transgender individuals.
Employers should review plan language to ensure inclusive, affirming care coverage.
15. Premium Waivers for Late Enrollment Notification — Senate Bill 1332
What It Does:
HRAs, HMOs, or PPO/EPOs may waive premiums when they receive late notice of an employee’s departure, if the employee received no covered services after leaving.
Effective:
Applies to fully insured HMO, PPO, and EPO plans starting Jan 1, 2026.
Implications for Employers:
Potential cost relief in employee departures with no plan usage.
Employers should understand documentation requirements to support waivers when applicable.
16. Mandatory Mediation for Out-of-Network Facility Claims — Senate Bill 2544
What It Does:
Out-of-network providers or plan admins can request mandatory mediation for facility claim disputes within 180 days of receiving an initial payment. Previously, there was no deadline.
Effective:
Provides mediation option from June 20, 2025, onward.
Implications for Employers:
Adds a structured dispute resolution mechanism, reducing litigation or bill surprises.
Employers might consider this when evaluating plan offerings and grievance procedures.
Employer Action Summary: Amending Cafeteria Plans
Key Reminder:
The only proactive step directly required of employers is the amendment of cafeteria plans, particularly to account for the extended newborn enrollment window under SB 896, by Dec 31, 2025, in preparation for 2026 plans.
Most other changes are insurer-driven and will be incorporated through plan renewals handled by carriers or PBMs.
Recommended Employer Checklist:
Action ItemRecommendationCafeteria Plan AmendmentUpdate for SB 896 enrollment change by Dec 31, 2025Plan Document ReviewEnsure terms reflect telehealth parity, CAR‑T coverage, gender transition, preauth changesVendor Contract AuditConfirm PBM and insurer contracts comply with data, gag clause, physician risk arrangementsMember Communication UpdatesDraft clear notices on changes: AI denial restrictions, incentive design, surprise billing protections
Closing Thoughts: A Leap Forward for Texas Health Plans
The 89th Texas Legislature's actions represent a pivotal advancement in employer-sponsored health coverage. These laws reflect emerging priorities: healthcare delivery modernization through telehealth, protection of vulnerable populations (like newborns and pediatric dental patients), ensuring transparency (PBM regulation, surprise billing), and strengthening governance (AI oversight, preauthorization improvements).
Together, these mandates foster a health insurance landscape in Texas that is more accessible, patient-centered, equitable, and transparent. Employers, plan sponsors, and HR leaders should begin preparations now—reviewing plan design, contracts, and communications—to align with the evolving regulatory environment for 2026 and beyond.