If you are a Texas business owner thinking about offering health benefits, you probably have one immediate question: what exactly is group health insurance and how does it actually work?
Group health insurance is a single health plan purchased by an employer that covers a group of employees and usually their dependents under one policy. The employer and employees split the monthly premium, which makes the coverage more affordable than buying an individual plan on the open market.
At Wilkerson Insurance Agency, we work with Texas businesses every week to help them set up group benefits that fit their workforce and their budget. This guide covers what you need to know before making a decision.
What Makes Group Health Insurance Different from Individual Coverage?
A group health plan covers all eligible employees under one shared policy. Individual health insurance covers one person who applies, qualifies, and pays on their own.
The Risk Pooling Advantage
The biggest practical difference is risk pooling. When an insurer covers a group, it spreads financial risk across all members. Some employees will use the plan heavily; others will barely touch it. That balance lets the insurer offer lower rates than it would charge someone applying alone. For your employees, this means access to coverage they might not qualify for or afford independently. For you as the employer, it creates a benefit that helps attract and keep good people. To understand more about why this matters, read our detailed guide on how small businesses benefit from group health insurance.
According to the Kaiser Family Foundation, employers covered roughly 73% of the average annual family premium in 2024. Employer-paid premiums are generally tax-deductible as a business expense.
Kaiser Family Foundation, Employer Health Benefits Survey 2024How Do Group Health Insurance Premiums and Cost-Sharing Work?
A premium is the fixed monthly amount paid to keep the plan active, whether or not anyone uses medical services that month. You pay part of it; your employees pay the rest through payroll deductions, usually pre-tax. For a full breakdown of what this looks like in dollar terms, see our resource on group health insurance costs in Texas.
Beyond premiums, employees also share costs when they use care. Three terms matter most:
The amount an employee pays out of pocket before the plan starts covering most services. Our guide on demystifying deductibles walks through how to find the right level for your team.
A flat fee paid at the time of a visit (e.g., $30 for a primary care appointment). Some plans apply copays before the deductible is met for certain services.
The most an employee will pay in a plan year. Once that limit is hit, the insurer covers 100% of covered services for the rest of the year.
After the deductible is met, many plans use coinsurance—for example, the insurer pays 80% and the employee pays 20% until the out-of-pocket maximum is reached.
What Types of Group Health Plans Are Available in Texas?
The plan type determines which providers employees can use and how their costs are structured. This choice affects both your monthly budget and your employees’ experience using the coverage. For a side-by-side comparison of all plan structures, see our full guide on HMO vs PPO vs EPO vs POS plans.
| Plan Type | Best For | Key Trade-Off |
|---|---|---|
| HMO Lowest Cost | Cost-conscious employers with stable workforce | Network-only; PCP referrals required |
| PPO Most Popular | Employees who want flexibility or existing care relationships | Higher premiums than HMO |
| HDHP + HSA Tax-Advantaged | Younger, healthier employees with fewer frequent visits | Higher deductible before coverage kicks in |
| EPO | Employees who want no referrals but lower cost than PPO | No out-of-network coverage at all |
| POS | Teams wanting a blend of HMO cost and some flexibility | Requires PCP; out-of-network costs more |
HMO Plans
A Health Maintenance Organization requires employees to choose a primary care physician and get referrals for specialists. Coverage is limited to in-network providers except in emergencies. Premiums are lower and cost-sharing is predictable, which makes HMOs a good fit for cost-conscious employers.
PPO Plans
A Preferred Provider Organization gives employees the freedom to see any doctor or specialist without a referral, including out-of-network providers at a higher cost. PPOs cost more in premiums but are preferred by employees who want flexibility or have established care relationships.
HDHP Plans Paired with HSAs
A High Deductible Health Plan carries a higher deductible and a lower monthly premium. When paired with a Health Savings Account (HSA), employees can set aside pre-tax dollars to cover costs until the deductible is met. Learn more in our post on maximizing your health savings with HSA plans. This structure works well for younger, healthier employees who do not expect frequent medical visits. If you are comparing HSA and FSA options, our HSA vs FSA breakdown is a helpful starting point.
EPO and POS Plans
An Exclusive Provider Organization requires in-network providers but does not need a PCP referral for specialists. A Point of Service plan blends HMO and PPO features: you need a PCP, but some out-of-network coverage is available at a higher cost share. The right fit depends on your workforce demographics, the carrier networks in your area, and what your employees actually value.
ICHRA Alternative: If a traditional group structure does not suit your business, you may also want to explore ICHRA as an alternative to traditional group health insurance. A licensed Texas broker can compare these options across multiple carriers so you are not guessing.
Who Qualifies for Group Health Coverage and When Can They Enroll?
Full-time employees working 30 or more hours per week are the standard eligible group under ACA rules. Many employers extend coverage to part-time workers as well, though smaller businesses are not required to do so.
Standard full-time eligibility threshold under ACA rules.
Adult children can stay on a parent’s employer plan until age 26, regardless of school or living status.
Legal spouse, biological/adopted/step-children under 26, and domestic partners (varies by plan).
Employees can enroll during their initial eligibility window or the annual open enrollment period. Our guide on what open enrollment means for small business owners and their employees explains how to manage this process effectively.
Important: Outside enrollment windows, employees can only join the plan after a qualifying life event—marriage, divorce, birth, adoption, or loss of other coverage. Missing an enrollment window can leave an employee uninsured for months, so clear communication from the employer matters.
Ready to compare group health plan options?
Wilkerson Insurance Agency walks you through plans from Texas’s top carriers at no cost to you.
What Are Texas Employers Required to Offer?
Before you decide anything, you need to understand where you stand legally.
Applicable Large Employers: 50+ Full-Time Equivalents
Employers with 50 or more full-time equivalent (FTE) employees—called Applicable Large Employers (ALEs)—must offer minimum essential coverage to full-time employees and their dependents. If they do not, and at least one employee receives a premium tax credit through the marketplace, the employer may face a federal penalty under the ACA employer shared responsibility rules. Our guide on how to offer health insurance in Texas walks through the compliance steps in plain language.
Small Businesses with Fewer Than 50 FTEs
Employers with fewer than 50 FTEs are not required to offer coverage under federal law. That said, many Texas small businesses choose to offer it because it makes hiring and retention significantly easier in a competitive market. If you are unsure how to count your FTEs correctly—since part-time hours factor into the total—a broker can help you run the numbers before making any commitments. You may also want to explore level-funded plan options as a cost-control strategy if your headcount is growing.
Small Business Health Care Tax Credit: Businesses with fewer than 25 FTE employees may qualify for this credit if they pay at least 50% of employee-only premiums and purchase coverage through the SHOP marketplace. More details are available at Healthcare.gov.
Why Wilkerson Insurance Agency Is the Right Partner for Your Texas Business
Working with an independent insurance broker gives you far more options and flexibility than working directly with a single carrier. At Wilkerson Insurance Agency, we compare group health plans from multiple top-rated insurers in Texas, explain the real differences in plain language, and help you select the best fit for your team and your budget—all at no cost to you as the employer.
We shop multiple carriers so you are not limited to one company’s plans. We also work with both fully insured and self-funded plan structures.
Our services are provided at no additional cost to your business. We are compensated by the carriers, never by you.
Local expertise on carrier networks, pricing, and state-specific rules. All of our agents are actively licensed with the Texas Department of Insurance.
Whether you have 2 employees or over 100, we have solutions that work. We serve businesses across Dallas-Fort Worth, Houston, Irving, and throughout Texas.
We help you avoid automatically renewing into a plan that no longer fits your needs, with ongoing support as your workforce changes.
Your team receives clear guidance so they fully understand their options and coverage—reducing confusion and increasing plan satisfaction.
Our office is located at 2727 LBJ Freeway, Suite 1062, Farmers Branch, TX 75234. Visit wilkersoninsuranceagency.com or call our office to speak with a licensed Texas agent who can walk you through your options and handle the enrollment process from start to finish.
Frequently Asked Questions
The Right Plan Looks Different for Every Business
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