Group health insurance
Real numbers, plain explanations and someone who stays on the line after the plan is in place. We quote across BCBSTX, Aetna, UnitedHealthcare, Cigna, Curative, Gravie and more, and we tell you what the differences actually mean.
Texas, 2024
$7,833
average employer-sponsored single coverage, per covered employee, per year
Cost
In 2024, employer-sponsored single coverage in Texas averaged $7,833 a year per covered employee, of which the employer paid about $6,318 and the employee paid about $1,515. That’s roughly $650 a year below the national average. Costs have risen since: small group premiums went up a median of 11% for 2026 nationally, and Texas carriers have requested a 16.9% weighted average increase for small groups in 2027.
Nationally, average annual premiums at small firms with 10 to 199 workers reached $9,211 for single coverage and $26,054 for family coverage in 2025, and the average single deductible at small firms was $2,631.
Sources: KFF State Health Facts, 2024 Texas figures; KFF Employer Health Benefits Survey 2025 for national and small firm figures; KFF analysis of preliminary 2026 rate filings; Texas 2027 preliminary rate filings via the federal Rate Review database. The Texas and national figures come from different surveys and different years, so they are not directly comparable. 2027 rates are requested, not approved.
The ages of your team. The single biggest factor, and the one you can do least about.
Where you are. Texas is split into rating areas, so a Harris County group and a Victoria County group are quoted differently.
Plan design. Deductible, out-of-pocket maximum, network breadth and drug coverage.
How much you contribute. This drives who enrolls, and who enrolls drives your rate.
Funding type. Fully insured, level funded or HRA-based, covered below.
Anyone who quotes you a per-employee figure before seeing your census is guessing. We will not do that. What we will do is take your census to market and come back with real quotes from real carriers, usually within a few business days.
Send us your censusTwo. Texas defines a small employer as one who employed an average of at least two but no more than 50 employees during the previous calendar year, and who employs at least two on the first day of the plan year. An eligible employee is one who usually works at least 30 hours a week. Part-time, temporary and seasonal workers don’t count toward that.
Two other rules decide whether a carrier will write the group. Texas law says at least 75% of eligible employees must enroll for small employer coverage to be available. Separately, most carriers require the employer to pay at least half of the employee-only premium. That contribution figure is a carrier underwriting requirement rather than a general Texas law, whatever you may read elsewhere.
If your group can’t meet the participation or contribution requirements, there is a federal window each year, November 15 to December 15, when carriers must offer coverage without applying them.
Sources: Texas Insurance Code §1501.002 and §1501.154; 45 CFR 147.104. Requirements vary by carrier and we confirm them when we quote.
One more thing worth knowing. Texas law prevents carriers and HMOs from refusing to sell a small employer plan because of the health status of the people in the group, so a group with a serious claim history can still get covered.
Source: Texas Department of Insurance consumer guidance.
No. The federal employer mandate only applies to employers with 50 or more full-time equivalent employees. Below that threshold there is no requirement to offer coverage, and no penalty for not offering it. Most small Texas employers who offer it do so because they’re competing for staff, not because they have to.
Some context on why they bother. Texas has the highest uninsured rate in the country at 16.7% as of 2024, and 21.6% of working-age Texans have no coverage at all. In a market like that, being one of the employers who offers a plan is a hiring advantage that costs less than the wage increase it substitutes for.
Source: 2024 American Community Survey one-year estimates, via Every Texan.
When you do pass 50 full-time equivalents, the rules change and there is an affordability test to meet. The safe harbor percentage for 2026 is 9.96% of household income. We will tell you well before you get there.
Applicable Large Employers
At 50 or more full-time equivalent employees you become an Applicable Large Employer, and three things kick in. You have to offer coverage that meets a minimum value standard. That coverage has to be affordable by the IRS test. And you have to file 1094 and 1095 forms every year. Get the affordability math wrong and the penalty is charged per employee, per month.
A growing share of our clients sit between 50 and 250 employees, and they nearly always come to us for the same reason. They crossed the threshold, the rules got heavier, and they wanted somebody who could talk them through it.
The affordability safe harbor for 2026 is 9.96% of household income, up from 9.02% in 2025. That sounds like a technicality until you work out that a contribution structure that passed last year can fail this year without anyone changing anything.
What you get from us at that size is the same thing our smaller clients get. Somebody who does the math before the plan year starts, files the forms correctly, and picks up the phone when the IRS sends a letter. At 200 employees you still call the same number and get a person who knows your plan.
Source: IRS affordability percentage for 2026. This is general information, not tax advice.
Talk to us about crossing 50Affordability safe harbor
of household income
Larger employers
Once a company gets over 50 employees, there are quite a few additional requirements that become important, and these are questions we get from our clients fairly often.
Generally, employers with 50 or more full-time employees and full-time equivalents are considered Applicable Large Employers (ALEs) and are required to provide and file ACA forms, including Forms 1094-C and 1095-C. We help clients make sure their coverage meets the requirements and assist with the required reporting.
Source: 26 U.S.C. §4980H(c)(2) and §6056
The employee’s required contribution for coverage must stay within the ACA affordability percentage set by the IRS each year. We help our clients make sure their contributions stay within that limit to help avoid potential penalties.
Source: IRS affordability percentage: 9.96% for 2026, 9.02% for 2025
There are two potential ACA penalties. Penalty A can apply if an employer does not offer coverage to at least 95% of its full-time employees. Penalty B can apply when coverage is offered but is not affordable or does not provide minimum value.
Source: 26 U.S.C. §4980H(a) and (b)
Generally, FMLA applies to private employers with 50 or more employees for 20 or more workweeks. Eligible employees may be entitled to job-protected leave and continuation of their health benefits.
Source: 29 U.S.C. §2611(4); 29 CFR §825.104
Larger employers can have additional ERISA and reporting requirements, including Form 5500 for welfare plans with 100 or more participants. We help our clients stay on top of these requirements as they grow.
Source: 29 CFR §2520.104-20
Plan types
With a fully insured plan you pay a fixed premium and the carrier carries all the claims risk. With a level funded plan you pay a fixed monthly amount covering expected claims, administration and stop-loss coverage, and you may get money back if your group’s claims come in low. Fully insured is the most predictable. Level funded can be cheaper for a younger, healthier group and carries more variability.
The traditional arrangement. One premium, no surprises, and no interest in what your claims actually looked like. It’s the right answer for most groups under about 25 lives, and for any employer whose cash flow can’t take a bad quarter.
You pay a steady monthly amount, but underneath it your dollars are split between expected claims, admin and stop-loss insurance that caps your exposure. If your group uses less than expected, some of the claims fund can come back at the end of the year. If it uses more, the stop-loss picks it up. You also get claims data, which fully insured plans rarely give you at this size, and that data is what makes future negotiation possible.
It suits a younger, healthier group whose owner is comfortable with some year-to-year variability. It’s not free money, and we’ll say so.
A captive pools several employers together so they share risk and buy stop-loss as a block. Whether one makes sense comes down to size and risk. The larger your employee population, the more predictable your claims become, because of the law of large numbers. Under about 500 employees a group usually isn’t big enough to absorb a bad claims year, so we generally don’t recommend one. Once you reach the 500+ range, there’s generally enough claims volume to make a self-funded or captive arrangement more predictable, and that’s when we’d absolutely recommend looking into one.
Below that size, the things people actually want from a captive are tighter cost control, a look at their own claims history, and the chance of money back at the end of the year. You can get all three from a level funded plan without owning the risk. That’s the route we take.
Pairing a higher deductible plan with an employer-funded HRA lets you buy a cheaper plan and then cushion the first layer of employee cost yourself. Done well it lowers total spend without the team feeling it. Done carelessly it just moves cost onto your people.
We quote across these, put them next to each other with real numbers, and explain the trade-off in each. We don’t have a house preference.
Renewal
Most brokers send an email. Here is what happens instead.
We ask your carrier for the renewal and, where available, your claims experience.
Your census goes to the carriers that are competitive for a group like yours, not just the one you’re already with.
Your current plan next to the alternatives, with the real cost to the business and the real cost to an employee at each tier. Not a carrier brochure.
In person where we can. We tell you what we would do and why.
Enrollment meetings, on site, in English and Spanish, so people understand what changed and why.
Renewal is the moment most employers discover whether they have a broker or just a policy. This is the part of the job we compete on.
Rising rates are the reason most people call us, so it’s worth being straight about it.
Premiums are rising because underlying medical costs are rising, roughly 9% a year, and because specialty drugs, including the GLP-1 medications, are landing hard on small group risk pools. It’s not something a broker can talk a carrier out of.
What can genuinely move your number
What cannot
Source: KFF analysis of 2026 preliminary rate filings.
Carriers
We’re independent, so we’re not tied to one carrier and we don’t have a quota to hit with anyone.
Medical
Life, disability and worksite
And others. Which markets are competitive changes year to year and by group size, which is the whole point of using a broker.
Carrier availability varies by group size, county and plan year. We confirm at quote.
You sign a one-page Agent of Record letter naming your new broker on your existing policy. That’s the whole process. Your plan, your carrier, your network, your price and your employees’ ID cards all stay exactly the same until your renewal. It can be done at any point in the year, not only at renewal, and it costs nothing.
Broker compensation is built into carrier rates whether or not you use a broker, so having one doesn’t raise your premium. The only thing that changes is who answers when you call.
Answers first
No. Most employers contribute toward employee-only coverage and let employees pay the difference to add a spouse or children. Family coverage is expensive: nationally, employees at small firms paid an average of $8,889 a year toward family coverage in 2025 (KFF). How you split that is one of the bigger decisions we’ll help you make.
You can set eligibility rules, like full-time staff only or a waiting period after hire, but they have to be applied consistently. Picking and choosing individuals is where employers run into non-discrimination problems. Cody handles that side.
Possibly, but it’s narrower than it sounds. The Small Business Health Care Tax Credit is worth up to 50% of employer premium contributions, but you need fewer than 25 full-time equivalent employees, average annual wages below an inflation-adjusted threshold, and you generally have to enroll through SHOP. It’s also limited to two consecutive tax years and phases out quickly above 10 employees. We’ll tell you honestly whether you qualify rather than using it as a selling point.
Source: IRS
It’s the gap between someone starting work and their coverage beginning. 90 days is the federal maximum. Many of our clients use first of the month following 30 days, which is simpler to administer and friendlier to the new hire.
Typically 2 to 4 weeks from receiving your census, depending on carrier turnaround and how quickly enrollment forms come back. If you are up against a deadline, tell us and we’ll work to it.
A census: names or initials, dates of birth, home ZIP codes, who is enrolling and at what tier. If you have your current plan summary and renewal letter, send those too. That’s enough to go to market.
Send us your census and we’ll come back with quotes from the carriers that are actually competitive for a business your size, with the trade-offs explained. No cost, and no obligation to move.
