Gail runs a small accounting firm in Tyler, Texas, with ten dedicated employees. She’s proud of the close-knit team she’s built and the way they take care of their clients, but she knows there’s one more thing she can do to take care of her staff—offer health insurance. Gail doesn’t have to provide health coverage for her team, but she wants to. She believes that giving her employees health benefits will help her keep her top talent while showing her appreciation for their hard work. But, like many Texas small business owners, Gail is trying to figure out how to do it without blowing her budget.
If you’re in Gail’s shoes, don’t worry. You can offer meaningful health insurance options to your employees, and it doesn’t have to be complicated or unaffordable. In this guide, we’ll walk through the best options for small businesses with fewer than 50 employees, just like Gail’s firm, and how you can make the right decision for your business.
Do You Have to Provide Health Insurance?
Gail’s first question was whether she even had to offer health insurance. The good news is that under the Affordable Care Act (ACA), small businesses with fewer than 50 full-time employees are not required to provide business health insurance plans. That said, Gail knows that offering health benefits could make a big difference in keeping her team happy and attracting new hires when her business grows. Health insurance coverage might not be legally required, but in today’s competitive job market, it’s an important way to stand out and show employees that you value them.
By offering employee health insurance, Gail could also take advantage of potential tax credits and enjoy a healthier, more engaged workforce. Employees who feel cared for tend to be more loyal and productive, which could save her money in the long run.
Affordable Health Insurance Options for Texas Small Businesses
Once Gail decided she wanted to offer health insurance, her next step was to explore the health plan options available for a small business like hers. She found that there are several ways to provide meaningful coverage without taking on massive costs. Her concern was which coverage options would provide the best care at the best price.
Group Health Insurance Plans
After exploring online, Gail learned about traditional group health insurance plans when she called an agent at Insurance For Texans. Group health insurance allows small business owners to provide coverage for all employees under one policy, simplifying the process of offering insurance.
Gail discovered that group plans come in a few different types, such as Health Maintenance Organizations (HMOs) and Preferred Provider Organizations (PPOs). Each type of plan offers different levels of flexibility and coverage, so Gail could choose a plan that fits both her business and her employees’ needs. If her employees want a broader range of doctors to choose from, a PPO might be a good fit. If they’re happy sticking within a network of doctors to save money, an HMO could work well. The downside is that monthly premium costs can be higher on these plans.
Health Reimbursement Arrangements (HRAs)
As Gail explored more flexible options, she came across Health Reimbursement Arrangements (HRAs). HRAs let Gail reimburse her employees for medical expenses and health insurance premiums. Essentially, instead of offering a traditional health plan, Gail sets aside tax-free funds for each employee to use for their healthcare needs.
This approach gives her employees more control over their healthcare spending, and it gives Gail flexibility in terms of how much she contributes. She liked the idea of helping her employees get the care they need while keeping costs manageable for her small firm.
Individual Coverage HRA (ICHRA)
Gail also learned about Individual Coverage HRAs (ICHRAs), which allow business owners to give employees a set amount of money to buy their own individual health insurance policies through the ACA Exchange. This was another option that appealed to Gail because it meant she wouldn’t have to deal with the administrative burden of managing a group plan. However, since this may not cover the employee premiums in full it can frustrate some workers.
With an ICHRA, Gail can offer a meaningful benefit to her team, and her employees can pick health insurance that fits their unique needs including non-ACA catastrophic policies. This flexibility was important to Gail since her employees are in different stages of life—some are single, while others have families to consider.
Self-Funded Group Health Plans
Gail also explored the possibility of setting up a self-funded group health plan. With this option, Gail would work with a private health insurance company to set aside money to pay her employees’ medical claims directly. If the employees on the plan did not utilize their healthcare coverage throughout the year, there was a potential for a refund of premiums contributed. However, if they had a need for a lot of medical care the plan would convert to a fully insured plan automatically.
While self-funded plans can be a cost-effective solution, Gail realized it required underwriting to qualify. For a small firm like hers, this option might not be the best fit if her folks had many pre-existing conditions. She felt it worth considering for her Texas business because it could potentially open up affordable health insurance coverage options she could not access otherwise.
Weighing the Costs and Benefits
For Gail, and any small business owner in Tyler or elsewhere in Texas, the decision to offer health insurance boils down to balancing the costs with the benefits. Gail quickly realized that while providing health insurance might seem expensive upfront, the long-term benefits—like happier employees, potential tax savings, and reduced turnover—far outweigh the costs.
It’s important to keep in mind that the right health insurance plan will depend on your team’s needs. For example, Gail’s team is mostly younger, and only a couple of them have families. That meant she could consider a higher-deductible plan with lower premiums, while still offering solid coverage. Understanding your employees’ needs is key to making the right choice.
Other Perks You Can Offer if Health Insurance Isn’t in the Budget
Sometimes, health insurance might not be in the budget right away, but there are still other ways to support your employees’ health. Gail
Catastrophic Health Plans
One option Gail looked into was offering a catastrophic health plan that was not considered compliant with the Affordable Care Act. This provided coverage for accidents, major illnesses, and gave them some cash for services. It is not for all situations, but can definitely work well if your employees understand how to use it and manage out of pocket expenses well.
Telemedicine Services
Another option Gail considered was offering telemedicine services. Telemedicine allows employees to access healthcare professionals remotely, often for a lower cost than in-person visits. Gail knew that offering telemedicine would be an affordable way to provide her employees with convenient access to doctors without needing to commit to a full-blown health insurance plan. While this isn't considered in the types of health insurance typically offered, it can be a nice perk for those who love convenience.
Wellness Programs
Gail also realized that a wellness program could go a long way in improving her team’s health and morale. Whether it’s offering fitness challenges, gym memberships, mental health support, or access to wellness apps, these programs show employees that their health matters, even if traditional health insurance isn’t an option just yet.
Steps to Finding the Right Plan
Gail didn’t jump into offering health insurance without a plan. She followed a few simple steps to make sure she was making the right choice for her firm while she was working with an experienced health insurance agent who understands the Texas landscape.
Step 1: Assess Your Budget
First, Gail took a hard look at her budget to see what her business could realistically afford. She balanced the potential cost of insurance with the benefits she expected from offering it, like improved employee retention. She also weighed the tax benefits against the annual cost.
Step 2: Talk to an Insurance Professional
Once Gail narrowed down her options, she consulted with an experienced small business health insurance professional who understood the Texas market. This advisor at Insurance For Texans helped her figure out the fine details, including employee monthly costs and out of pocket costs as well, and ultimately guided her toward the right plan.
Step 3: Research Plan Options
Gail didn’t stop at just one option. While consulting with the experienced licensed agent, she researched group plans, HRAs, ICHRAs, and self-funded plans to see what made the most sense for her business. She understood that there were concerns beyond the cost of health insurance, and she was trying to account for them.
Step 4: Gather Employee Feedback
Finally, Gail asked her employees what was most important to them when it came to health insurance. She recognized that having in-network care was a high priority to her employees. This feedback helped her make a decision that benefited her business while meeting her team’s needs.
Find the Right Health Insurance Option for Your Texas Small Business
Just like Gail, whether you're in Tyler or somewhere else around our great state, you can find a health insurance solution that works for your small business. Whether it’s a traditional group plan, an HRA, or even telemedicine services, offering health-related benefits can boost employee satisfaction and help your business thrive. Gail knew it, and so do you.
If you’re ready to explore health insurance options for your Texas business, work with an experienced small business health insurance professional who understands the unique needs of Texans. Insurance For Texans has been helping small businesses for years and our experts are ready to help you, just like they did Gail.
Click the button below to get started discovering what your healthcare options are today.