Medical is the core of it, but it’s rarely the whole thing. Here’s what else goes
into a package for a Texas business, what each piece does, and how we decide what belongs in
yours.
A typical package for a small Texas business is built in two layers. The core layer is what the
employer funds, usually group medical and often dental, vision and a base amount of group term
life insurance. The voluntary layer is what employees choose and pay for themselves through
payroll, like extra life insurance, disability, accident or critical illness plans. Most
employers start with medical and add outward as the budget allows.
The mix matters more than the length of the list. A 12-person design studio and a 200-person
machine shop can spend the same money per head and need completely different packages. We
build from what your people would actually use, not from a menu.
Layer one
What the employer usually funds
Group medical
Dental and vision, sometimes
A base amount of group term life
Short and long term disability, sometimes
Layer two
What employees usually choose and pay for
More life insurance for themselves and their family
Accident, critical illness, hospital indemnity, cancer and gap plans
Higher tier medical or dental options where offered
Dental & vision
Group dental and vision insurance
Dental and vision are the two benefits employees ask for most after medical, and they’re the
cheapest way to make a package feel more generous. Both can be employer paid, employee paid, or
shared. Dental plans come as DHMO or PPO. Vision plans typically cover an annual eye exam plus an
allowance toward frames, lenses or contacts.
Dental: what to look at
Almost every dental plan covers preventive care, cleanings and exams, at or near 100%, because
carriers would rather pay for a cleaning than a crown. The differences show up in the middle:
basic work like fillings, major work like crowns and bridges, and whether orthodontia is
included at all.
A DHMO keeps costs down by tying employees to a network dentist. A PPO costs more and lets
people keep the dentist they already have, which in practice is the thing employees care about
most. Watch for waiting periods on major work, usually 6 to 12 months, and for annual maximums,
which are often lower than people expect.
Vision: what to look at
Vision is inexpensive and popular out of proportion to its cost. The things that vary are the
frame allowance, how often you get new lenses, and whether contacts come instead of glasses or
alongside them.
Is it worth bundling with your medical carrier?
Sometimes. Bundling can shave the rate and it means one bill, one portal and one enrollment. It
can also mean accepting a weaker dental network to get a better medical rate. We quote it both
ways and show you the difference in actual dollars rather than telling you which is better in
principle.
Life & disability
Group life and disability insurance
Group term life pays a benefit if an employee dies while covered, usually set as a flat amount or
a multiple of salary. Disability insurance replaces part of an employee’s income if they
can’t work. Short term disability covers weeks to months, long term disability covers longer.
Employers commonly pay for a base amount of life insurance and let employees buy more.
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Group term life and AD&D
The advantage of buying life insurance through work is guaranteed issue. Up to a set amount,
employees are covered without medical questions or an exam, which matters a great deal to anyone
who has been turned down for individual coverage. Above that amount they can usually buy more,
with underwriting.
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Short term disability
Three things decide what a short term plan is worth. The elimination period, which is how long
someone waits before benefits start, often 7 to 14 days. The benefit period, which is how long
payments continue, often 3 to 6 months. And the replacement percentage, usually around 60% of
income.
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Long term disability
Long term picks up where short term ends. The detail that matters most is the definition of
disability: whether the plan pays when someone can’t do their own job, or only when they
can’t do any job at all. That difference is worth more than a few dollars of premium.
One thing worth knowing about tax. If the employer pays the premium and
doesn’t include it in the employee’s income, the benefit is generally taxable when it
is paid out. If the employee pays with after-tax dollars, the benefit is generally tax free.
It’s a small decision at setup and a big one at claim time. We’ll walk you through it.
General information only. Tax treatment depends on how the plan is set up. Confirm with your tax advisor.
Worksite benefits
Worksite and voluntary benefits
Worksite benefits are policies employees choose and pay for themselves through payroll
deduction, usually at no cost to the employer. They pay cash directly to the employee when
something specific happens, like an accident, a hospital stay or a critical illness diagnosis.
They are the least expensive way for a small employer to make a benefits package meaningfully
stronger.
They matter more now than they used to. Deductibles have climbed: the average single
deductible at small firms was $2,631 in 2025 (KFF Employer Health Benefits
Survey 2025). A worksite plan that pays cash on a hospital admission is aimed squarely
at that gap.
$2,631average single deductible at small firms, 2025KFF Employer Health Benefits Survey 2025
The ones we place most
Accident.Pays a set amount for injuries, ER visits and follow-up care. Popular with trades and anything physical.
Critical illness.A lump sum on diagnosis of a covered condition such as cancer, heart attack or stroke.
Hospital indemnity.Pays per admission and per day. The most direct answer to a high deductible.
Cancer plans.Still asked for by name, particularly by older workforces.
Gap plans.Sit alongside a high deductible plan and cover part of what the employee would otherwise pay.
Enrollment is the whole game
Voluntary benefits only work if people understand them, and a form in an email doesn’t do
that. Cody runs the enrollment meetings on site and Julie runs them in Spanish, and we talk
through what each plan pays and when. Participation goes up when someone explains it in person.
So does the value of everything else you’re paying for.
HSAs, FSAs & HRAs
HSAs, FSAs and HRAs: what’s the difference?
All three let people pay medical costs with untaxed money, but they work differently. An HSA is
owned by the employee, needs a qualifying high deductible plan, and the balance rolls over forever.
An FSA is employer sponsored, has a lower limit, and mostly has to be spent within the plan year.
An HRA is funded and designed entirely by the employer, and the employee never owns the money.
Owned by the employee
Health Savings Account (HSA)
The employee owns it and takes it with them when they leave. It only pairs with a qualifying
high deductible health plan. Money goes in untaxed, grows untaxed and comes out untaxed for
qualified medical expenses, which is why people who can afford to fund one treat it as a
retirement account with a medical door.
2026 self-only
$4,400
2026 family
$8,750
2027 self-only
$4,500
2027 family
$9,000
For 2026 the contribution limit is $4,400 for self-only and $8,750 for a
family, with an extra $1,000 catch-up from age 55. For 2027 those rise to
$4,500 and $9,000. To qualify in 2026 a plan needs a deductible of at least
$1,700 self-only or $3,400 family, with out-of-pocket maximums
no higher than $8,500 and $17,000.
Source: IRS Revenue Procedures for 2026 and 2027 inflation-adjusted amounts. Limits change annually. Figures shown are for calendar years 2026 and 2027.
Sponsored by the employer
Flexible Spending Account (FSA)
Employer sponsored, funded by salary reduction, and available from day one at the full annual
election, which is genuinely useful for someone facing a big expense in January. For 2026
the health FSA limit is $3,400, with up to $680 able to carry into 2027 if the
plan allows it.
Worth knowing for 2026
$5,000$7,500
Worth knowing for 2026: the dependent care FSA limit went from $5,000 to
$7,500, its first increase since 1986. If you have working parents
on staff, that’s a real change and almost nobody has told them.
Source: IRS Revenue Procedure 2025-32. Carryover and grace period rules depend on your plan document.
Designed by the employer
Health Reimbursement Arrangement (HRA)
Employer funded, employer designed, and the employer keeps whatever isn’t used. It gives
you the most control of the three. HRAs can sit alongside a higher deductible plan to cushion
the first layer of cost, and there are individual coverage versions that reimburse employees for
cover they buy themselves.
One current caution on individual coverage HRAs. The enhanced federal premium tax credits that
made individual market plans cheap expired at the end of 2025, which weakens the case for sending
employees to the individual market in 2026 and 2027. We’ll model it honestly rather than
pushing you toward it.
There is no “CHOICE arrangement” tax credit. Those provisions were removed from the final legislation in 2025, and a lot of broker content still says otherwise.
Which one fits?
Roughly: HSA if you’re moving to a high deductible plan and want employees building a
balance they keep. FSA if you want a predictable, low-commitment tax break on a traditional plan.
HRA if you want to control exactly what gets covered and how much. Most of our clients end up with
a combination. We’ll run the numbers for your group.
Medicare at 65
What happens when an employee turns 65?
Nothing has to change. An employee who turns 65 can stay on your group plan. What changes is how
Medicare and your plan interact. For employers with 20 or more employees, the group plan generally
pays first and Medicare pays second. For smaller employers, Medicare generally pays first. Getting
that order wrong causes claim problems months later.
20 or more employees
1 The group plan generally pays first
2 Medicare pays second
Fewer than 20 employees
1 Medicare generally pays first
2 The group plan becomes secondary
This is the question employers get asked and can’t answer, and getting it wrong is
expensive for the employee. There are also rules about what an employer may and may not do here.
You can’t offer someone money or an incentive to drop the group plan and take Medicare
instead.
What we do is straightforward. We sit down with the employee, explain how the two work together
for their situation, and help them decide. You’re not expected to be the expert on this,
and you shouldn’t be giving the advice yourself.
If you have fewer than 20 employees, this matters more than you think
Below 20 employees Medicare pays first and your group plan becomes secondary. In that situation
we usually encourage the employer and the employee to look hard at whether Medicare makes more
sense than staying on the group plan. Depending on the person it can work out better for them
and cheaper for you. It also means less premium for us, which is worth knowing when you weigh up
the advice.
General information. Coordination rules depend on employer size and the employee’s circumstances.
Let’s build the package that fits.
Tell us what you have now and what’s bothering you about it. We’ll come back with real options and real numbers, and we’ll explain them to your team as well as to you.
