Everything to Know About Small Business Health Insurance in Texas
Published on June 01, 2018
Updated August 29, 2019
According to the Small Business Administration, more than 4.7 million Texans, or 45.6 percent of all workers in the state, are employed by small firms. As firms compete to bring on the most productive and innovative employees, small group health insurance plans are a great way to make your business a desirable place for quality employees to work at. By understanding the unique nature of small business health insurance in Texas, you may have an easier time starting a business, expanding an existing firm, or simply succeeding in the small business market.
How does small business health insurance in Texas work?
As with small group health insurance in most states, Texas regulates employers’ options and responsibilities for providing coverage to those who work for them. Thus, to understand small business health insurance in Texas, you have to be familiar with the state’s policies on:
- Coverage obligations– Like most states, Texas does not require businesses that have fewer than 50 employees to offer small group health insurance. While many of these small businesses do provide health insurance in Texas, they don’t have to pay a penalty if they choose not to. However, if such employers offer small group health insurance to some people, they have to extend the offer to all of their full-time employees.
- Full-time employment– The Texas Department of Insurance defines “full-time employee” as anyone who works 30 hours a week or more for the same organization. But because many Texans don’t work the same number of hours from week to week, the Department measures how many hours each employee works per month and divides that by four. Those who work more than 120 hours are full-time employees, regardless of whether they divide that time evenly from week to week.
- Premium provisions– Small businesses that offer health benefits in Texas are not required by law to help cover their employees’ premiums. But many insurance companies expect them to do so when they sign up for small group health insurance plans. Thus, in practice, to offer small business health insurance in Texas, a firm must cover 50 percent or more of the premiums.
As in most states, the more employees a business has, the more likely it is to offer health insurance in Texas. Among firms with fewer than 10 employees, only 28 percent offer small group health insurance according to the Small Business Administration; this increases to 53 percent among firms with 10 to 24 workers, 68 percent among those with 25 to 99 workers, and 90 percent among those with 100 to 499 workers. Thus the larger your operation, the more likely it is that you’ll need to offer small business health insurance in Texas.
What are the benefits of providing group health insurance in Texas?
In addition to the general advantages of small group health insurance, there are some unique benefits to offering coverage to employees in Texas specifically. These include:
- Affordable Premiums– Due to several factors such as larger pools, and less risk, group health insurance plans generally cost less per individual than individual plans. This means your employees are gaining access to more affordable health insurance.
- State Incentives– Texas offers a number of incentives to help pay for small group health insurance. In particular, it caps annual price increases on small group health insurance plans at 15 percent. It also lets small businesses work together in negotiating lower prices for insurance, and it bans insurers from ending coverage without legitimate reason.
- Prime Location– Dallas is one of the regional headquarters for the ACA coalitions, or groups of public authorities and community partners that help extend quality healthcare to as many people as possible. This makes the city and the rest of Texas a prime location for information on and access to health coverage.
eHealth offers comprehensive small group health insurance in Texas and across the United States. For more information on affordable, effective coverage, visit our website today.
This article is for general information and may not be updated after publication. Consult your own tax, accounting, or legal advisor instead of relying on this article as tax, accounting, or legal advice.