Offering health insurance benefits to employees is a big decision for small businesses in Victoria. This can affect your profitability, margins, and your ability to attract and keep great employees for your business. There’s multiple options available to small businesses in the Crossroads area to offer health insurance to their employees without cutting in to your bottom line. Our team can advise you and create a health insurance plan that fits your company and employee’s needs. Schedule your Free Consultation today!
Do I Need to Provide Health Insurance to Employees?
Small business health insurance can be an added expense that most owners aren’t able to afford and avoid due to the costs. What if there was a way to offer health insurance to your team with no cost to your business? The good news is that small businesses under 50 employees are not required in the state of Texas to offer health insurance to their employees, which allows us to use other resources for employee benefit options. We can help you create a benefits package for employees that doesn’t cost your business!
Once you have more than 50 full time employees you are required to offer creditable coverage, or Minimum Essential coverage (MEC), to your employees. MEC is defined by the Affordable Care Act as “health insurance that meets specific requirements including coverage for essential health benefits and certain actuarial value standards”. Small businesses under the 50 full time employee rule can utilize a couple different strategies to avoid high costs of providing health insurance benefits.
Marketplace Insurance
Marketplace health insurance, also known as ACA (Affordable Care Act), can be used for employers that have less than 50 employees, and doesn’t currently offer health insurance. Employees would be able to shop for their own health insurance plans on the Marketplace with our team. This gives them the added perk of being able to choose the level of coverage they want, carriers, and have more control over the price of their plan.
Enrollment Periods
The open enrollment period for Marketplace health insurance is from Nov 1st through January 15th. Enroll by December 15 for coverage that starts January 1, and by January 15 for coverage that starts February 1. If you have certain qualifying events you may be eligible for a Special Enrollment Period (SEP) that will allow you to enroll in a plan outside of these date ranges. Speak with our team to see if you qualify today!
How Premiums are Determined
Premiums for ACA insurance is based on your household size that is filed on your tax return and the amount of income for your household. Most individuals and families qualify for savings in the form of a subsidy or Advanced Premium Tax Credits. These credits are used to lower the cost of your health insurance premiums and out of pocket costs such as your deductibles, copayments and coinsurance. The filing application process for the Marketplace can be somewhat confusing but our expert team can assist you or your employees with the enrollment process! We’ll handle the application and recommend the best plan based on your specific needs.
Group Health Insurance
Small employers in Texas can offer health insurance benefits to their employees in the form of Group Health Insurance also known as Employer Sponsored Plans. Small employers are defined as businesses with 2 – 50 employees, regardless of how many hours the employees work. If you provide health insurance it must be available to all employees who work 30 hours or more per week and their dependents. You can also enroll into your small-employer health plan as long as 1 or more employees is enrolled as well. You’re not required by law to pay premiums for your employee’s health plans, but insurance companies may require you to pay 50% of the premiums. You can also contribute a higher percentage towards these premiums.
Enrollment Periods
New employees must have at least 31 days to enroll into an employer sponsored plan from their start date. This does not mean that their coverage has to start within this time frame, you can require them to wait up to 90 days after they enroll for coverage to begin. If they don’t enroll within the 31 day period you can require them to wait until the next open enrollment period to join. Some employees may qualify for a Special Enrollment Period, based on certain life events, such as getting married or having a child.
Minimum Essential Coverage
Employer sponsored plans must provide employees with Minimum Essential Coverage (MEC) as deemed by the Affordable Care Act in order to be compliant. MEC is defined by 10 essential health benefits that all plans must cover as well as mandated health benefits by the state of Texas. These services include:
- Ambulatory Care (Outpatient): Visits to clinics, doctor’s offices, and same-day procedures that don’t require an overnight hospital stay.
- Emergency Medical Services: Access to urgent care in life-threatening situations, whether it’s an accident or sudden illness, even if out of network.
- Hospitalization (Inpatient): Coverage for hospital stays, including surgeries, room and board, and other services during admission.
- Maternity and Newborn Health: Support throughout pregnancy, delivery, and postpartum care for both mother and baby.
- Mental Health & Addiction Services: Includes therapy, counseling, and treatment for mental health conditions and substance use disorders.
- Prescription Medication: Insurance helps cover the cost of doctor-prescribed drugs, from generics to specialty meds.
- Recovery & Disability Support: Rehabilitative and habilitative services that help regain skills after injury or manage long-term conditions.
- Lab Work & Diagnostic Testing: Coverage includes blood tests, screenings, and imaging that help diagnose and monitor health issues.
- Preventive & Wellness Care: Routine check-ups, immunizations, and health screenings to help you stay healthy and catch problems early.
- Children’s Health Services: Comprehensive pediatric care including dental and vision for kids and teens.
How Rates are Determined
Insurance carriers use multiple factors to determine the rates of the monthly premiums that your business and your employees will pay for health coverage. These factors include the risk profile of the entire group, the industry your business is in, the amount of individuals that will be covered, and where your business and employees are located. Other factors that determine rates will be the amount of coverage these plans will have, the type of networks they will utilize (HMO/PPO), and what the deductibles and out of pocket expenses will be. The lower the out of pocket the higher the premium and vise versa.
ICHRA and QSEHRA
Health Reimbursement Arrangements (HRAs) allow for small employers to reimburse employees for their medical expenses including premiums, copays, deductibles and coinsurance. HRAs are employer sponsored and tax advantaged, offering flexibility to both employers and employees.
Employees can choose their own health insurance coverage and be reimbursed for qualified medical expenses. Employees would use their own money for medical expenses and submit receipts to their employer in order to be reimbursed up to the HRAs allowance. Employees often shop coverage through the Marketplace giving them more control over the plans and carriers.
Individual Coverage Health Reimbursement Arrangement (ICHRA)
ICHRA is a form of HRAs that allows small and large employers (50+ employees) to offer a reimbursement allowance for medical expenses. Employers set a monthly allowance that is available to employees, which is tax free for the employer as well as the employees. ICHRAs allow employers to set different reimbursement allowances based on employee class such as full-time and part-time.
Qualified Small Employer Health Reimbursement Arrangement (QSEHRA)
QSEHRA is another form of HRAs designed for small businesses with less than 50 full time employees who aren’t offering traditional group coverage. Employers create a yearly allowance for medical expenses that are tax free to the employees up to that limit and tax advantaged for the employer. Employees must have Minimum Essential Coverage through a plan that they find individually or through the Marketplace. QSEHRAs allow for predictable health insurance costs and a lower cost alternative to group plans.
Accident & Hospital Insurance
Accident and hospital insurance plans can protect against high medical bills when you become hospitalized or have any accidents. These plans can be either employer or employee sponsored and offer protection for employees both in and out of work. These plans pay a cash benefit for covered accidents and illnesses to assist with medical services. You can use this money for ambulance fees, intensive care, therapy, rehabilitation, missed work and much more! Offer your employees the protection they deserve with hospital indemnity and accident plans!
Dental, Vision & Hearing
Dental, vision and hearing plans can be added to your health insurance package as separate policies to have added coverage for these health needs. These plans can assist with the cost of routine exams and procedures that are essential to your health. Most plans will cover 100% of a routine exam and a fix percentage for other needed services. Let’s find the right plan for your dental, vision or hearing needs today!
Life Insurance
Life insurance is a contract between an individual and an insurance provider that ensures financial protection for the individual’s beneficiaries in the event of their passing. Upon the policyholder’s death, the provider pays out a lump sum to designated beneficiaries, which can help cover funeral expenses, replace lost income, or support long-term financial needs. Since there are various types of life insurance policies available, it’s essential to review your options with a trusted provider to find the plan that best suits your needs.
Why It Matters for Employers and Employees
Offering life insurance as part of an employee benefits package shows a commitment to your team’s well-being, helping employees feel more secure about their future and their families’ financial stability. It can also enhance recruitment and retention by adding value to your compensation package. For many employees, employer-provided life insurance is a simple, cost-effective way to gain coverage they might not otherwise pursue on their own.
Let’s Get You Covered
At Insurance With Don, we understand the unique challenges small businesses face when it comes to navigating insurance. That’s why when you work with Donahvan, you’re not just getting a policy, you’re getting a dedicated partner who knows the ins and outs of the industry and has your back every step of the way. Insurance rules and options are constantly changing, but with a trusted expert by your side, you can stay focused on running your business while we handle the details.
Our mission is to help protect what matters most: your business, your employees, and your family by finding cost-effective solutions that work for you. Let’s build a plan that fits your needs. Call Donahvan today at (361) 266-8995 and let’s get started!