In Texas, a small group is an employer with 1 to 50 full-time-equivalent employees. If you meet that threshold and have at least one employee who is not the owner or the owner's spouse, you likely qualify for a small-group ACA plan. These plans are guaranteed-issue, which means no employee can be turned down. Here is what you need to know about participation rules, contribution minimums, eligibility, and waiting periods before you enroll.
Get a Free QuoteThe Affordable Care Act defines a small employer as a business with 1 to 50 full-time-equivalent employees. In Texas, that is the group size that buys small-group health insurance. If you have 51 or more, you move into the large-group market, which has different rules and pricing.
Anyone working 30 or more hours per week counts as one full-time employee. This is the straightforward part of the calculation.
30+ hours/weekPart-time hours are added up and divided by 120 per month to create full-time-equivalent numbers. Two part-time employees working 15 hours each equal one FTE.
FTE calculationEmployees working fewer than 120 days per year generally do not count toward your total. This can help seasonal businesses stay in the small-group pool.
Usually excludedUnder the Affordable Care Act, small-group health plans are guaranteed-issue. The carrier must offer coverage to every eligible employee, regardless of pre-existing conditions, medications, or medical history. They cannot charge more based on health, gender, or occupation.
This is one of the biggest advantages of group coverage over individual plans. In the individual market, underwriting and health history can affect availability and price. In the small-group market, they cannot.
Carriers want to avoid situations where only the sickest employees sign up. To prevent that, they set participation and contribution minimums. In Texas, these rules vary slightly by carrier, but the general framework is consistent.
Most carriers require 50 to 75 percent of eligible employees to enroll in the plan. If you have 10 eligible employees, typically 5 to 8 must sign up to meet the threshold.
50–75% enrollMost carriers require the employer to pay at least 50 percent of the employee-only premium. Some accept a lower percentage if the total dollar amount is reasonable. We help you meet whichever rule your chosen carrier uses.
Usually 50% minIn Texas, owners can usually enroll if they are also W-2 employees of the business. Sole proprietors with no employees do not qualify for a group plan, but owner-employees of LLCs, S-corps, and C-corps typically do.
W-2 owner requiredNot everyone connected to your business can enroll. Carriers have clear eligibility rules that determine who qualifies as a covered employee and who can be added as a dependent.
Full-time employees working the required hours, part-time employees if the employer chooses to include them, and owner-employees with W-2 income.
Legally married spouses of enrolled employees can be added to the plan. Domestic partner rules vary by carrier and plan.
Biological, adopted, and stepchildren are eligible up to age 26, regardless of student status, residency, or financial dependence.
Independent contractors, 1099 workers, and seasonal employees working fewer than 120 days typically do not qualify for group coverage.
Employers can require new hires to wait before becoming eligible for health insurance. Under the ACA, the maximum allowed waiting period is 90 days. Most Dallas small businesses set it somewhere between 30 and 90 days.
The waiting period starts when the employee is otherwise eligible, not necessarily their first day of work. For example, if you require 60 days of employment before enrollment, day 1 of the waiting period begins after those 60 days are complete.
We walk Dallas employers through every requirement, every form, and every carrier rule. No fee, no pressure.