Resources & FAQ
Straight answers about employee benefits in Texas.
Cost
4 questions
How much does group health insurance cost per employee in Texas?
In 2024, employer-sponsored single coverage in Texas averaged $7,833 a year per covered employee, with employers paying an average of $6,318 of that. Nationally in 2025, small firms averaged $9,211 for single coverage and $26,054 for family coverage. Your actual number depends on the ages of your team, your county, the plan design and your contribution level.
Source: KFF State Health Facts 2024; KFF Employer Health Benefits Survey 2025
Why did my premium go up this year?
Mostly because underlying medical costs are rising, at around 9% a year, with specialty drugs including GLP-1 medications adding pressure on small group pools. Small group premiums rose a median of 11% for 2026, and Texas carriers have requested a 16.9% weighted average increase for 2027. Those 2027 figures are requested, not approved.
Source: KFF; Texas 2027 preliminary rate filings
How much of the premium does the employer have to pay?
Texas law does not set a general minimum employer contribution for the open small group market, despite what most broker websites say. In practice most carriers require the employer to pay at least half of the employee-only premium as a condition of writing the group. That 50% is also a condition of the federal small business tax credit. Requirements vary by carrier.
Does using a broker cost more than going direct?
No. Broker compensation is built into carrier rates whether or not you use one, so your premium is the same either way. What differs is whether anyone helps you compare options, run enrollment and straighten out a claim when it goes wrong.
Eligibility and rules
6 questions
How many employees do you need for a group plan in Texas?
Two. Texas defines a small employer as one averaging at least two and no more than 50 employees in the previous calendar year, with at least two on the first day of the plan year. An eligible employee usually works at least 30 hours a week.
Source: Texas Insurance Code §1501.002
Does a small business in Texas have to offer health insurance?
No. The federal employer mandate applies only at 50 or more full-time equivalent employees. Below that there is no requirement and no penalty for not offering coverage.
How many employees have to enroll?
Texas law makes small employer coverage available where at least 75% of eligible employees elect to participate. If your group can’t meet the participation or contribution requirements, there is a federal window from November 15 to December 15 each year when carriers must offer coverage without applying them.
Source: Texas Insurance Code §1501.154; 45 CFR 147.104
Can a carrier turn us down because someone is sick?
No. Texas law bars carriers and HMOs from refusing to sell a small employer plan because of the health status of the employees.
Source: Texas Department of Insurance
How long can a waiting period be?
90 days is the federal maximum. Many employers use first of the month following 30 days, which is easier to administer and better for new hires.
Do we have to cover part-time staff?
Generally no. An eligible employee in Texas is one who usually works at least 30 hours a week. Eligibility rules have to be applied consistently across everybody, though, which is where employers get into trouble.
Switching and setting up
4 questions
How do I switch benefits brokers?
You sign a one-page Agent of Record letter naming the new broker on your existing policy. Your plan, carrier, network, price and employee ID cards all stay the same until your renewal, employees do nothing, there is no cost, and it can happen at any time of year.
How long does it take to put a plan in place?
Usually 2 to 4 weeks from receiving your census, depending on carrier turnaround and how quickly enrollment forms come back.
What do you need to give us a quote?
A census with dates of birth, home ZIP codes and who is enrolling at which tier. Your current plan summary and renewal letter help. That’s enough to take to market.
When should we start looking at renewal?
90 days out. 60 is workable. 30 means you take whatever the carrier offers, which is how most employers end up accepting an increase they had options on.
Compliance
3 questions
What compliance do we have to deal with as a small employer?
Depending on your size and plan type: ERISA plan documents and summary plan descriptions, COBRA or Texas state continuation, Section 125 documents if employees pay premiums pre-tax, required annual notices, and non-discrimination testing. Above 50 full-time equivalents, ACA reporting and the employer mandate come in as well.
What changed about ACA reporting for 2026?
Employers no longer have to mail 1095-B and 1095-C forms to everyone, provided they post a clear and accessible notice telling employees they can request one. For 2025-year forms, the notice had to be posted by March 2, 2026 and remain accessible until October 15, 2026, and forms had to be provided on request by January 31, 2026 or within 30 days of the request, whichever came later. The statute of limitations was also extended to six years and the window to respond to a proposed penalty went from 30 days to 90.
Source: Paperwork Burden Reduction Act; Employer Reporting Improvement Act
What is non-discrimination testing and why does it matter?
It checks that your plan doesn’t favor highly compensated employees over everyone else. Section 125 plans and self-funded arrangements are subject to it. Employers usually fail it by accident, having set up something that felt perfectly reasonable, and only find out when it costs them.
Claims and everyday problems
3 questions
An employee’s claim was denied. What now?
Send it to us. Most denials we see are coding or processing errors rather than genuine exclusions, and they get fixed once someone actually reads the explanation of benefits and takes it up with the carrier. That’s included in what we do, and your employee can contact us directly rather than going through you.
What if an employee gets a bill they think should have been covered?
Same answer, and it’s worth doing before paying it. Surprise bills are often network or billing errors. We’ll read it, work out what happened and deal with the carrier.
We hired someone mid-year. What do we do?
Tell us, or add them in Employee Navigator. We handle the carrier side and make sure they’re enrolled correctly and on time.
Glossary
Plain English glossary
The words that come up constantly, without the jargon.
- Deductible
- What an employee pays out of their own pocket before the plan starts paying its share. In 2025 the average single deductible at small firms was $2,631. Source: KFF Employer Health Benefits Survey 2025.
- Coinsurance
- After the deductible is met, the share of the bill the employee still pays. An 80/20 plan means the carrier pays 80% and the employee pays 20%, until they hit the out-of-pocket maximum.
- Out-of-pocket maximum
- The most an employee can pay in a plan year for covered in-network care. After that the plan pays everything. It’s the number that actually protects someone, and it deserves more attention than the deductible usually gets.
- Copay
- A flat amount for a specific thing, like $30 to see a doctor. Separate from coinsurance and often payable before the deductible is met.
- Network
- The doctors, hospitals and facilities that have agreed rates with the carrier. Going outside it costs more, and sometimes costs everything.
- Fully insured
- You pay a fixed premium and the carrier takes all the claims risk. Predictable, and you learn nothing about your own claims.
- Level funded
- You pay a fixed monthly amount split between expected claims, administration and stop-loss cover. If claims come in low, some of it can come back. If they come in high, stop-loss absorbs it.
- Stop-loss
- Insurance that protects an employer against unusually large claims under a level funded or self-funded plan. The thing that makes those arrangements survivable.
- Captive
- An arrangement where several employers pool together to share risk and buy stop-loss as a block. Below about 500 employees a group usually can’t absorb a bad claims year, so we generally don’t recommend one. From about 500 up, there’s usually enough claims volume to make it predictable, and it’s worth looking into.
- Guaranteed issue
- Coverage offered without medical questions or an exam, up to a set amount. Common on group life, and the reason buying life insurance through work is worth more than people realize.
- Agent of Record
- The broker officially attached to your policy. Changing it takes a one-page letter and it doesn’t disturb the plan.
- Section 125
- The part of the tax code that lets employees pay their share of premiums before tax. Requires a written plan document, and it’s subject to non-discrimination testing.
- ICHRA
- An individual coverage HRA. The employer reimburses employees for individual market coverage rather than buying a group plan. Worth modeling carefully in 2026 and 2027, because the enhanced federal premium tax credits that made individual coverage cheap expired at the end of 2025.
Calendar
Dates worth having on the calendar
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90 days before your renewal
Start marketing the plan. This is the single most valuable date on the list.
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November 15 to December 15
The federal window when carriers must offer small group coverage without applying participation or contribution requirements.
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Late in the calendar year
IRS contribution limits for the following year are published. HSA limits for 2027 are $4,500 self-only and $9,000 family.
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Early March
ACA paper filing deadline, and the date any 1095 availability notice needs to be posted.
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End of March
ACA electronic filing deadline.
Dates are for the current cycle and shift slightly year to year. We send our clients the calendar so nobody has to track it.
Still have a question?
Call us. You’ll get a person who knows your plan, and if we don’t know the answer we’ll say so and go find it.