If you run a Texas small business with 2–50 employees, you're in one of the friendliest group health markets in the country. Carrier competition is strong, level-funded options have made costs more predictable, and the tax treatment is favorable.
Do I have to offer it?
Below 50 full-time-equivalent (FTE) employees: voluntary. At or above 50 FTEs: required by the ACA employer mandate, with penalties for non-compliance. Most Texas small businesses fall below the threshold.
Why offer it anyway
- Retention. The single biggest non-salary driver of voluntary turnover.
- Tax treatment. Premiums are deductible, and HSAs are pre-tax for employees.
- Recruiting. Texas's labor market is competitive; group coverage is now table stakes for white-collar roles.
Funding structures
Fully-insured (carrier takes all risk, premium is fixed) is simplest for groups under 25. Level-funded (you pay a fixed amount that includes claims fund + admin + stop-loss; refund if claims come in low) is the sweet spot for many 25–100 person Texas groups. Self-funded becomes worth modeling above 100.
What it costs
Premiums vary widely by employee ages, ZIP, and plan design. A reasonable benchmark: $400–$700/employee/month for the employee tier on a Silver-equivalent plan, with employers contributing 50–75%.