Your Texas Small Group Health Insurance Resource for Plans and Quotes

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According to federal and state laws, a “small employer” enjoys certain legal rights regarding their level of coverage, protection against rate increases, and other benefits for the health plans they provide their employees. For the purpose of health insurance, a business is considered a small employer if the number of full-time employees is between 2 and 50 people. Full time employees are those that work for at least 30 hours/week, and are not contract workers or seasonal hires.

Overview of Small Employer Health Coverage

Texas insurance laws state that a “small employer” is determined by the number of employees eligible for small group health insurance, and not the total number of employees. So if your company has 70 total employees, with 15 part-time workers and 5 employees with health coverage from another source, your business can still qualify is a small employer.

Health insurance for small employers should be given to all qualified full-time employees, their dependents, and spouses under equal terms.

An insurance carrier can require a small employer to provide coverage to at least 75% of eligible employees, as a condition for offering a small group health plan. For this to take effect, a carrier should always “round up” when computing the percentage. For instance, a business with 10 employees and 7 would like to participate for coverage will satisfy the requirement. If there are only 2 eligible employees, the law requires both to be insured, even if they are husband and wife.

A small employer status protects the business owner by mandating a limitation (based on percentage) on annual rate increases. There are also fewer provisions for specific health conditions required to cover small group health plans.

A Texas employer, large or small, cannot require an employee to enrol in a health plan as a condition for employment. On the other hand, an employer cannot exclude an employee from participating in a health plan because of the employee’s age, medical history, medical condition, or other medical risk factors.

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