Texas Navigator Entity Registration Bond: A Comprehensive Guide

February 16, 2022

Texas Navigator Entity Registration Bond

This guide provides information for insurance agents to help their customers obtain a Texas Navigator Registration Entity bond

At a Glance:

  • Average Cost: Between $250 to $1,500 per year based on the applicant’s credit
  • Bond Amount: $25,000
  • Who Needs it: All navigator entities operating in Texas
  • Purpose: To ensure the public will receive compensation for financial harm if the navigator entity violates registration law
  • Who Regulates Navigator Entities in Texas: The Texas Department of Insurance

Background

The Patient Protection and Affordable Care Act (ACA) created health benefit exchanges that are marketplaces where consumers can purchase health benefit plans that meet the minimum coverage requirements outlined in the ACA. The act requires health benefit exchanges to award grants to organizations that assist consumers in obtaining a health benefit plan. These organizations are referred to as “navigator entities”.

Texas statute 19.4004 requires all navigator entities operating in the state to register with the Department of Insurance. The Texas legislature enacted the registration laws and regulations to ensure that navigator entities engage in ethical business practices. To provide financial security for the enforcement of the registration law, navigator entities must purchase and maintain a $25,000 surety bond to be eligible for registration.

What is the Purpose of the Texas Navigator Entity Bond?

Texas requires navigator entities to purchase a surety bond as part of the application process to obtain a business registration. The bond ensures that the public will receive compensation for financial harm if the navigator fails to abide by the regulations set forth in Texas Administrative Code 28-1-19-W. Specifically, the bond protects consumers if the navigator entity engages in any acts of fraud or negligence. In short, the bond is a type of insurance that protects the public if the navigator entity violates registration law.

Texas Navigator Entity Bond Form

Texas Navigator Entity Bond Form

How Can an Insurance Agent Obtain a Texas Navigator Entity Surety Bond?

BondExchange makes obtaining a Texas Navigator Entity bond easy. Simply log in to your account and use our keyword search to find the “navigator entity” bond in our database. Don’t have a login? Enroll now and let us help you satisfy your customers’ needs. Our friendly underwriting staff is available by phone at (800) 438-1162, email, or chat from 7:30 AM to 7:00 PM EST to assist you.

At BondExchange, our 40 years of experience, leading technology, and access to markets ensures that we have the knowledge and resources to provide your clients with fast and friendly service whether obtaining quotes or issuing bonds.

Is a Credit Check Required for the Texas Navigator Entity Bond?

Surety companies will run a credit check on the owners of the navigator entity to determine eligibility and pricing for the Texas Navigator Entity bond. Owners with excellent credit and work experience can expect to receive the best rates. Owners with poor credit may be declined by some surety companies or pay higher rates. The credit check is a “soft hit”, meaning that the credit check will not affect the owner’s credit.

How Much Does the Texas Navigator Entity Bond Cost?

The Texas Navigator Entity bond can cost anywhere between $250 to $1,500 per year. Insurance companies determine the rate based on a number of factors including your customer’s credit score and experience. The chart below offers a quick reference for the bond cost on the $25,000 bond requirement.

$25,000 Navigator Entity Bond Cost

Credit Score Bond Cost (1 year)
680+ $250
625 – 679 $375
575 – 624 $938
550 – 574 $1,250
500 – 549 $1,500

Who is Required to Purchase the Bond?

Texas requires all navigator entities to purchase a surety bond before applying for a business registration. To paraphrase Texas Administrative Code 19.4002, a navigator entity is an organization that has been awarded a grant by a health benefit exchange to oversee individual navigators who provide the following consumer services:

  • Conduct public education activities to raise awareness of the availability of qualified health plans
  • Distribute fair and impartial information regarding enrollment in qualified health plans, including the availability of premium tax credits
  • Facilitate enrollment in qualified health plans
  • Refer consumer complaints regarding their health plan to the appropriate authorities
  • Provide information in a way that is culturally and linguistically appropriate to the population the entity serves

How Do Navigator Entities Become Registered in Texas?

Navigator entities in Texas must complete several steps before obtaining their registrations. Below are the general guidelines but registration applicants should refer to Texas administrative code 28-1-19-W for details on the process.

Registration Period – All Texas Navigator Entity Registrations expire on August 31 of each year and must be renewed before the expiration date

Step 1 – Receive a Grant from a Health Benefit Exchange

Applicants must be selected by a Health Benefit Exchange and receive a grant award authorizing them to register as navigator entities. The U.S. Department of Health and Human Services (HHS) operates all health benefit exchanges in Texas.

Step 2 – Meet the Financial Responsibility Requirements

Navigator entities must satisfy one of the following financial responsibility requirements:

    • Purchase and maintain a $25,000 surety bond
    • Purchase liability insurance with a minimum limit of $100,000 with a deductible of 10% or less of the policy’s full amount
    • Deposit $25,000 with the Department of Insurance
    • Be a self-insured governmental entity

Step 3 – Complete the Application

Navigator entities must contact the Department of Insurance to obtain a registration application. The department will provide the navigator entity with an application form, which must be completed and returned.

How do Texas Navigator Entities Renew Their Registration?

The Department of Insurance will send the navigator entity instructions on how to renew their registration prior to the expiration date. All Texas Navigator Entity Registrations expire on August 31 of each year and must be renewed before the expiration date.

What are the Insurance Requirements for Navigator Entities in Texas?

Navigator entities must satisfy the financial responsibility requirement outlined in Texas statute 19.4010 be either:

  • Purchasing a $25,000 surety bond
  • Purchasing liability insurance with a minimum limit of $100,000 with a deductible of 10% or less of the policy’s full amount
  • Depositing $25,000 with the Department of Insurance
  • Being a self-insured governmental entity

How Do Texas Navigator Entities File Their Bond?

Navigator entities should mail their completed bond form, including the power of attorney, to the following address:

Texas Department of Insurance
Mail Code 107-1A
P.O. Box 149104
Austin, Texas 78714-9104

The surety bond requires signatures from both the surety company that issues the bond and from a representative of the navigator entity. The surety company should include the following information on the bond form:

  • Legal name and address of entity/individual(s) buying the bond
  • Surety company’s name and address
  • Bond amount
  • Bond number
  • Date the bond is signed
  • Date the bond goes into effect

What Can Texas Navigator Entities Do to Avoid Claims Against Their Bonds?

To avoid claims made against their bonds, navigator entities in Texas must follow all registration regulations in the state, including some of the most important issues below that tend to cause claims:

  • Do not engage in any acts of fraud
  • Do not be negligent
  • Do not omit relevant information when advising consumers

What Other Insurance Products Can Agents Offer Navigator Entities in Texas?

Texas requires navigator entities to either purchase a surety bond or obtain liability insurance. Bonds are our only business at BondExchange, so we do not issue any other types of insurance, but our agents often utilize brokers for this specific line of business. A list of brokers in this space can be found here.

How Can Insurance Agents Prospect for Texas Navigator Entity Customers?

Texas unfortunately does not provide a public database containing information on active navigator entities operating in the state. We suggest contacting the Department of Insurance Directly to obtain this information. Contact BondExchange for additional marketing resources. Agents can also leverage our print-mail relationships for discounted mailing services.

2022-03-21T11:25:16-04:00