Find out how small business health insurance plans work in Texas.
As one of the largest states in America, Texas is home to both one of the largest state economies and many small- to medium-sized businesses. More than 4.4 million Texans, or 45 percent of all employees in the state, work for small firms, according to the Small Business Administration.
As a Texas business owner, you may have questions about how group health plan coverage works in your state. Continue reading to learn about Texas small business health insurance.
How to qualify for small business health insurance in Texas
Texas small businesses and Texas small employers have the choice of whether to offer group health plans to their employees.
If your Texas small business has less than 50 full-time equivalent employees, you are not required to offer health insurance, and you won’t have to pay a penalty. If your company does decide to offer Texas small business health insurance, then you should know the following differences between full-time and full-time equivalent employees.
- Full-time employees – According to federal law, a full-time employee works a minimum of 30 hours during a typical week.
- Full-time equivalent employees – As per the law, each 120 hours worked per month by part-time employees count as one full-time equivalent employee.
In Texas, deciding to provide small business health insurance means that you are required to offer coverage to all of your employees who work at least 30 hours or more each week, as well as their dependents. Newly hired employees must have at least 31 days from their start date to enroll in your small business health insurance plan.
As a Texas business owner, you can enroll in your company’s small business health insurance plan if at least one of your employees also enrolls in the plan. In this case, it is important for you to know that the employee cannot be a business owner, partner, or family member. If you meet the requirements to have a group plan, but none of your employees opt to be covered by the plan, then you will likely not be able to get a group health insurance plan. Not only do you have to have at least one employee, but at least one employee has to be opting into your plan too.
Qualifying for the small business health insurance tax credit in Texas
As a Texas small business owner, you may be eligible for a health tax credit to help you afford the cost of offering group health insurance to your employees.
Typically, the requirements to qualify for a small business health insurance tax credit in Texas are:
- Your business has 25 or less full-time or full-time equivalent employees.
- Your business contributes at least 50 percent toward paying for the cost of employee premiums.
- Your business pays an average annual salary or wage of less than $50,000 a year per worker (this amount is indexed annually for inflation).
- Your company buys a Small Business Health Options Program (SHOP) plan.
If your Texas small business does qualify, then the maximum available federal tax credit will reimburse your company for up to 50 percent of the premiums you pay for the medical, dental, and vision health insurance of your employees. It is important for you to know that the tax credit is only available to your Texas small business for a total of two consecutive years.
If your Texas business has less than 10 full-time equivalent employees who are paid wages less than $25,000 annually, then your company may be eligible for the maximum tax credit amount.
How to find small business health insurance in Texas
eHealth can help you find affordable group health plans for your Texas small business. As an authorized federal government partner, eHealth offers a broad selection of small business health insurance from among the most popular and leading brand-name health insurance companies in Texas, including:
- Blue Cross and Blue Shield of Texas
- National General Benefits Solutions
It’s fast, free, and easy to use eHealth to get Texas health insurance for your business. With eHealth’s online marketplace, you can compare plans from multiple insurance companies, find personalized quotes, and get unbiased support and advice from licensed health care agents. Visit eHealth today to learn more about Texas small business health insurance plans that work for you and your company.
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.