Texas Small Business Health Insurance: Plans, Rules and Costs

By Michael Sprague, Licensed Health Insurance Agent · Reviewed by Heather Sprague, Licensed Health Insurance Agent

Texas small business health insurance lets you offer coverage to your team through a small group plan, a level-funded plan or a health reimbursement arrangement that helps employees buy their own plans. Texas insurance law defines a small employer as a business with 2 to 50 employees.

This guide covers Texas's small group rules, continuation coverage, costs and how to get started before the November 15 to December 15 enrollment window. Call 888-730-6031 for a free quote from a licensed agent.

Texas Small Group Rules

The Texas Department of Insurance defines a small employer as a business with 2 to 50 employees. Small group plans must cover the ACA essential health benefits, and carriers cannot deny a small employer because of employees' health.

Outside the yearly window, carriers usually require a minimum share of eligible employees to enroll and a minimum employer contribution. Owner-only businesses generally buy individual coverage instead. See health insurance for small business owners.

Options for Texas Employers

Option	How it works in Texas
Small group plan	One or more HMO, PPO or EPO plans from a carrier licensed in Texas.
Level-funded plan	A set monthly cost with possible refunds. Often fits healthy groups of 5 or more.
ICHRA	Employees buy individual plans on HealthCare.gov or off-exchange and get reimbursed tax-free.
QSEHRA	For fewer than 50 employees with no group plan. 2026 caps: $6,450 self-only, $13,100 family.
SHOP plan	Needed to claim the small business health care tax credit.

Texas Continuation Coverage (Mini-COBRA)

Federal COBRA applies to employers with 20 or more employees. Texas adds its own continuation law for insured plans. People who are not eligible for COBRA can generally keep their group coverage for up to 9 months, and people who had COBRA can get up to 6 more months after it ends. The person must generally have been covered for at least 3 months before losing coverage.

Texas continuation does not apply to self-funded plans, because the state does not regulate them.

What Small Group Health Insurance Costs in Texas

Small group premiums in Texas depend on employee ages, location, plan type and how many family members enroll. Nationally, KFF found an average 2025 premium of $9,211 a year for single coverage and $26,054 for family coverage at firms with 10 to 199 workers.

The only way to know your real price is a quote based on your employee census. See our guide to small business health insurance cost.

Small Business Open Enrollment in Texas

From November 15 to December 15, Texas small group carriers waive minimum participation and contribution rules for coverage that starts January 1. It is the easiest time for a small team to start a plan. Read more about small business open enrollment.

ICHRA in Texas

Texas has one of the largest ACA Marketplaces in the country, with many insurers in most metro areas. That gives ICHRA employees plenty of plan choices. Some insurers, such as Cigna and Baylor Scott & White Health Plan, are leaving the Texas Marketplace for 2027, so check your area.

Compare an ICHRA with a group plan in our ICHRA vs QSEHRA vs group health insurance guide.

How to Start a Texas Small Group Plan

• Gather your EIN and a recent payroll or state wage report.
• Build an employee census with dates of birth and ZIP codes.
• Decide your budget and what share of premiums you will pay.
• Compare plans, networks and hospitals your team uses.
• Submit the application and first premium before the carrier deadline.

Tax Breaks for Texas Small Businesses

Premiums you pay for employees are generally deductible. Employers with fewer than 25 full-time equivalent employees and modest average wages may qualify for the small business health care tax credit, worth up to 50% of premiums for two years.

Texas Small Business Health Insurance: FAQ

How many employees do I need for group health insurance in Texas?

Texas law defines a small employer as having 2 to 50 employees. Most carriers need at least one eligible employee who is not an owner or the owner's spouse.

Are Texas employers required to offer health insurance?

No. Only federal ACA rules for employers with 50 or more full-time employees, including equivalents, apply.

Does Texas have mini-COBRA?

Yes. Texas continuation provides up to 9 months for people not eligible for COBRA, or 6 more months after COBRA.

Can Texas employers use an ICHRA?

Yes. Employees buy individual plans through HealthCare.gov or directly from insurers.

When can a Texas small business enroll?

Any month if you meet carrier rules, or November 15 to December 15 without participation and contribution minimums.

Next Steps for Texas small business health insurance

Start with a headcount, a budget and a census. Then compare a Texas small group plan with an ICHRA or QSEHRA. For the national overview, see our guide to small business health insurance.

Want a licensed agent to help? Call 888-730-6031, Monday through Friday, 9 a.m. to 6 p.m. Eastern, or request a free quote.

Sources

1. Texas Department of Insurance: Small employer health insurance
2. TexasLawHelp: COBRA and state continuation
3. HealthCare.gov: Small businesses
4. KFF 2025 Employer Health Benefits Survey

Related Guides

• Small business health insurance
• Texas health insurance
• Small business open enrollment
• Texas open enrollment

Vivna Insurance is a licensed independent agency, not a government website. Our help is free; we are paid by the insurance companies we work with. Coverage options, deadlines and costs vary by plan and state.