In Texas, 4.7 million people or about 45.6 percent of the state population works in small firms. Businesses compete for productive and innovative employees. One of the essential ways to create a favorable workplace is by providing a small group insurance plan. Below are basic information to understand the nature of small business health plans in Texas.
What is Texas Small Business Health Insurance
Which is the best health insurance? There are two primary categories of insurance for small business health coverage. You can choose from individual health insurance plans and group health insurance plans.
Individual Health Insurance. It is a health plan that the individual avails to protect and cover themselves and their families. Everyone can apply for individual health insurance. Business owners who cannot offer group coverage purchase this plan.
Group Health Insurance. It is a form of employer-sponsored medical-coverage. The company owner and the worker share the cost of the coverage and you can extend your plan to your dependents or families.
Who can qualify for Health Tax Credit
To be eligible for the full tax credit in Texas, you must meet the following criteria:
- Your firm must have at least 25 full-time workers
- The average annual salary per employee must be less than $50,000.
- The minimum employer contribution to employee coverage is 50 percent.
If you are part of the business owners with less than 25 full-time equivalent workers and pay less than $50,000 annually, you can apply for tax credits under the Patient Protection and Affordable Act. It aims to provide health insurance small business plans and tax-exempt organizations a cut on the group health insurance cost.
The federal tax credit reimburses the qualified small businesses for up to 50 percent of the premium costs paid and may include dental, medical, and optical insurance plans. Tax-exempt organizations can qualify for up to at least 35 percent of their premium expenses.
Businesses with less than ten full-time employees that pay an average $25,000 annual wage may qualify for full credit. They reduce the amount of credit that the companies pay for their full-time workers because of the eligibility rules and regulations on the part of full-time employees, not the number of employees. The businesses hire and use part-time workers to qualify to have more than 25 workers.
How does small business health insurance in Texas Work
Like most of the state’s group insurance plans, it provides coverage that regulates the employer’s options and responsibilities. The government works hard to look and offer quality services that work well to both employer and employee. To be familiar with the small company health insurance, it is best to understand its policies.
- Coverage Obligations. The government does not require small businesses with less than 50 employees to offer group health protection. Though, some of the small businesses provide insurance coverage. If you choose not to offer, you will not suffer any penalty. If the employers offer health insurance to selected employees, they need to extend their offer to their full-time equivalent employees.
- Full-time Employment. The Texas Department of Insurance data states that the full-time employee is a worker who puts in 30 hours a week or more for the company. But, the work schedule of Texans is different. That is why the Department calculates the hours that the employee works for a month and divides it by four. And, the workers who work more than 120 hours are full-time equivalent employees.
- Premium Provisions. The small businesses in Texas are not required to pay their employee’s premiums. However, insurance companies expect them to pay as they sign up for small group health insurance plans. Thus, in reality, for you to offer group health insurance plans, your company must cover more than 50 percent of the premiums.
If you have a large number of employees, the higher the possibility that you will offer health insurance in Texas. Only 28 percent of firms with less than ten employees provide a group health insurance plan; 53 percent of the firms with 10 to 24 employees; 68 percent of companies with 25 to 99 workers; and 99 percent for 100 to 499 employees. With this, the larger your operation, the higher the need to offer small business health insurance for small businesses in Texas.
What are the Advantages of Group Medical Insurance in Texas
Offering health insurance plans coverage to your employees in Texas will give you these benefits:
- Affordable Premiums. Having lesser risk and a larger pool, the group insurance plan costs less per individual than the individual plans. It means that your workers have access to affordable health insurance for companies.
- State Incentives. The government offers incentives that help you pay for your group health insurance. It allows you to cap the increase in the small group health insurance plans’ annual price for up to 15 percent. Your business can also negotiate and work together to get low price insurance. It also bans the insurers who cannot provide a valid reason in ending your coverage.
- Prime Location. The regional headquarters of the ACA coalition is in Dallas. The health insurance company looks for groups of public authorities and community partners to extend healthcare quality. You can access the information regarding health insurance quickly and efficiently.
Hard work is an essential trait in building a successful company. Searching for affordable small business health insurance can help you in expanding your firm. All businesses face special challenges in looking and availing health insurance coverage. Fortunately, the health care reform legislation provides small businesses opportunities to secure affordable health insurance.
The benefits of small business health insurance in Texas are it proves you affordable premiums, state incentives, and accessible prime location. You can easily expand your firm, attract potential investors, and scout for new talents.