Your four options.
| Option | Best for | Trade-offs |
|---|---|---|
| Small group plan | Teams in one area that want one shared network and a familiar benefit | Insurers set participation and contribution minimums; one plan design for everyone; costs rise with the group's ages |
| ICHRA (CHOICE Arrangement) | Fixed budgets, teams in several cities or states, mixed full-time and part-time staff | Employees shop for their own plan; unaffordable offers affect tax credits |
| QSEHRA | Fewer than 50 employees, simple setup, smaller budget | Annual caps ($6,450 / $13,100 in 2026); no group plan allowed |
| Taxable stipend | Very small teams wanting no administration | Taxable to employees; no tax advantage |
Traditional small group plans.
Small group plans cover businesses with up to 50 employees. Insurers usually require that a minimum share of eligible employees enroll and that the employer pay a minimum share of the employee premium, and at least one enrolled employee must not be an owner or owner's spouse. Premiums are based on the ages of the people enrolled and your county. Plans can start any month.
In both Texas and Oklahoma, small group plans are regulated by the state insurance department and follow the ACA's essential health benefit rules.
The Small Business Health Care Tax Credit.
- Fewer than 25 full-time equivalent employees.
- Average annual wages below an inflation-adjusted limit set by the IRS each year.
- You pay at least 50% of employees' self-only premiums.
- Coverage is bought through the SHOP marketplace, usually with an agent.
The credit is worth up to 50% of the premiums you pay (35% for tax-exempt employers) and can be claimed for two consecutive years on IRS Form 8941.
Want a licensed advisor to run your numbers?
Get my free optionsHow we help employers.
We quote group plans, model ICHRA and QSEHRA budgets including the affordability test for each employee class, and check whether you qualify for the tax credit. Our help is free to your business; licensed agents are paid by the insurer. Start with the form on this page or see our small business page.
Questions people ask.
How many employees do I need for a group health plan in Texas?
Small group plans are for up to 50 employees, and insurers generally want at least one enrolled employee who is not an owner or owner's spouse. Participation rules vary by insurer.
What is the cheapest way for a small business to offer health insurance?
It depends on your team. For many small, spread-out or younger teams, an ICHRA or QSEHRA with a fixed allowance costs less and is more predictable than a group plan.
Sources.
- HealthCare.gov, Small Business Health Care Tax Credit. healthcare.gov
- IRS, Small Business Health Care Tax Credit and Form 8941. irs.gov
- HealthCare.gov, CHOICE Arrangement (formerly ICHRA) for employers. healthcare.gov
- IRS Rev. Proc. 2025-32 (2026 QSEHRA limits). irs.gov
- Texas Department of Insurance, Small employer health insurance. tdi.texas.gov
General information for Texas and Oklahoma residents, not tax or legal advice. Rules and numbers can change; this page is reviewed on the date shown above. Your eligibility and prices are set by HealthCare.gov or the insurer when you apply.
Who wrote this.
RedHealth Advisors LLC is a licensed health insurance agency in Round Rock, Texas (Texas agency license 3449979, NPN 22110493), serving Texas and Oklahoma. Ryan Hutson is a licensed agent (NPN 21321807). Licensing details.