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Signed Into Law
Signed June 20, 2025Effective 2025-09-01
SB896

Regular Session

Relating to the enrollment period for newborns under certain health benefit plans.

Government Affairs & Regulatory Compliance Analysis

SB896: Government Affairs Overview

SB896 mandates that all fully insured Texas health plans extend the automatic coverage and enrollment window for newborns from 31 days to 60 days. This statutory change applies to plan years beginning on or after January 1, 2026, requiring employers to reprogram benefits administration systems and update Qualifying Life Event (QLE) protocols to prevent wrongful denial of coverage liability.

Sen. Cesar Blanco·Senate Bill·Regular Session

Moderate
Low Cost
Effective:2025-09-01
Business Impact

Who SB896 Affects

This legislation has regulatory implications for the following Texas businesses and organizations:

Regulatory Priority: moderate

Notable regulatory updates (effective 2025-09-01). Consider how these changes may affect your operations.

🏥

Healthcare

Affected business types:

  • Hospitals
  • Healthcare systems
  • Medical practices
  • Health insurance providers
View all healthcare legislation
🏦

Banking & Finance

Affected business types:

  • Banks
  • Credit unions
  • Financial services firms
  • Insurance companies
View all banking & finance legislation

Key Operational Considerations

  • 1Carrier Policies: Review your 2026 renewal documents. Ensure the policy explicitly cites the 60-day newborn enrollment period. Do not sign a policy containing the obsolete 31-day limitation.
  • 2TPA Agreements: If self-funded but opting into compliance (to match stop-loss requirements), amend your Third-Party Administrator Service Level Agreement (SLA) to extend the processing window.
  • 3HR Protocols: Train benefits staff to stop citing the "31-day rule" for 2026 plans. Misinforming an employee that they missed the deadline on Day 45 will create employer liability for medical costs.

Estimated Cost Impact

lowMinimal cost impact anticipated.

Enforcing Agencies

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SB896
Moderate
Relating to the enrollment period for newborns under certain health benefit plans.
Moderate Compliance Urgency
Requires near-term attention
Cost Impact
Low
Effective
2025-09-01
Enforcing Agencies
Texas Department of Insurance
Primary Author: Sen. Cesar Blanco
89th Texas Legislature
jdkey.com
01

Compliance Analysis

Key implementation requirements and action items for compliance with this legislation

Implementation Timeline

  • Effective Date: September 1, 2025.
  • Compliance Deadline: January 1, 2026.
  • *Note:* The law applies to plans delivered, issued, or renewed on or after Jan 1, 2026. If your plan renews on December 1, 2025, you remain under the 31-day rule until your December 1, 2026 renewal.
  • Agency Rulemaking: The Texas Department of Insurance (TDI) is not explicitly required to issue new rules, but we anticipate a Commissioner’s Bulletin in Q4 2025 to clarify "notice" requirements.

Immediate Action Plan

  • 1. Audit 2026 Materials: Immediately redline all Open Enrollment materials for the 2026 plan year to replace "31 days" with "60 days."
  • 2. Verify Renewal Date: Confirm the exact renewal date of your health plan. If you renew *before* Jan 1, 2026, clearly communicate to employees that the 31-day rule still applies to them for the interim period.
  • 3. Update Software: Open a ticket with your benefits administration vendor to change the hard-coded QLE deadline effective Jan 1, 2026.
  • 4. Consult Stop-Loss (Self-Funded Only): If you are self-funded, ask your stop-loss carrier if they require your plan document to mirror this state mandate to avoid coverage gaps.

Operational Changes Required

Contracts

  • Carrier Policies: Review your 2026 renewal documents. Ensure the policy explicitly cites the 60-day newborn enrollment period. Do not sign a policy containing the obsolete 31-day limitation.
  • TPA Agreements: If self-funded but opting into compliance (to match stop-loss requirements), amend your Third-Party Administrator Service Level Agreement (SLA) to extend the processing window.

Hiring/Training

  • HR Protocols: Train benefits staff to stop citing the "31-day rule" for 2026 plans. Misinforming an employee that they missed the deadline on Day 45 will create employer liability for medical costs.
  • Payroll Coordination: Prepare for larger retroactive deductions. Adding a dependent on Day 59 triggers two months of retroactive premiums in a single pay cycle. Payroll staff must be trained to warn employees of this financial impact.

Reporting & Record-Keeping

  • Summary Plan Descriptions (SPDs): You must amend all employee-facing benefits guides and SPDs for the 2026 plan year to reflect the 60-day window.
  • BenAdmin Systems: Contact your software vendors (Workday, ADP, Paycom, etc.) immediately to reconfigure the "Newborn" QLE logic. The system must not auto-reject applications submitted between Day 32 and Day 60.

Fees & Costs

  • Premium Catch-Up: There are no new state fees. However, the business must budget for the administrative cost of reprocessing claims if a newborn is added late in the 60-day window, requiring retroactive carrier adjustments.

Strategic Ambiguities & Considerations

  • Definition of "Notice": The statute requires the issuer to receive "notice of the birth" but does not define the format.
  • *Risk:* An employee might claim a verbal comment to a supervisor constituted "notice."
  • *Mitigation:* Your handbook must explicitly define "Notice" as the submission of the specific enrollment form or digital entry in your benefits portal.
  • Premium Remittance Timing: The law requires the carrier to receive the premium by the 60th day.
  • *Risk:* If an employee enrolls on Day 59, payroll cannot physically transfer funds to the carrier by Day 60.
  • *Mitigation:* TDI generally treats the employee's *authorization* of the deduction as satisfaction of the requirement. Ensure your enrollment form includes an express authorization for immediate retroactive premium deduction.

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JD Key Consulting specializes in Texas regulatory compliance strategy. Work directly with James Dickey—former Chairman of the Republican Party of Texas—to understand this bill's impact on your operations and develop an actionable compliance plan.

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Information presented is for general knowledge only and is provided without warranty, express or implied. Consult qualified government affairs professionals and legal counsel before making compliance decisions.

02

Legislative Timeline

This bill's path through the Texas Legislature

Filed
Jan 24, 2025
Passed Senate
Mar 26, 2025
Passed House
May 21, 2025
Signed
Jun 20, 2025
Effective
Sep 1, 2025
TopicsHealthHealth--children's InsuranceInsuranceInsurance--health & Accident
03

Senate Authors

Sen. Cesar BlancoDemocrat · Primary Author

House Sponsor

Rep. Sheryl ColeDemocrat · Primary Sponsor

Bill Text(with markup)

View bill text in multiple formats on Texas Legislature website

Fiscal NoteView Original

Related Legislation

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More from Sen. Cesar Blanco

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Related by Topic

View more Health legislation
Quick Reference

Frequently Asked Questions

Common questions about SB896

Q

What does Texas SB896 do?

SB896 mandates that all fully insured Texas health plans extend the automatic coverage and enrollment window for newborns from 31 days to 60 days. This statutory change applies to plan years beginning on or after January 1, 2026, requiring employers to reprogram benefits administration systems and update Qualifying Life Event (QLE) protocols to prevent wrongful denial of coverage liability.

Q

Who authored SB896?

SB896 was authored by Texas Senator Cesar Blanco during the Regular Session.

Q

When was SB896 signed into law?

SB896 was signed into law by Governor Greg Abbott on June 20, 2025.

Q

Which agencies enforce SB896?

SB896 is enforced by Texas Department of Insurance.

Q

How significant are the changes in SB896?

The regulatory priority for SB896 is rated as "moderate". Businesses and organizations should review the legislation to understand potential impacts.

Q

What is the cost impact of SB896?

The cost impact of SB896 is estimated as "low". This may vary based on industry and implementation requirements.

Q

What topics does SB896 address?

SB896 addresses topics including health, health--children's insurance, insurance and insurance--health & accident.

Q

What are the key dates for SB896?

Key dates for SB896: Effective date is 2025-09-01. Consult with legal counsel regarding applicability.

Q

Which Texas businesses are affected by SB896?

SB896 primarily affects healthcare providers and medical facilities, insurance companies and financial institutions. These businesses should review the legislation with their legal and compliance teams to understand potential impacts.

Need Strategic Guidance on This Legislation?

JD Key Consulting is an Austin, Texas-based government affairs firm led by James Dickey, former Chairman of the Republican Party of Texas. We specialize in Texas regulatory compliance and legislative strategy for data centers, energy, banking, and manufacturing.

Legislative data provided by LegiScanLast updated: January 11, 2026