How many small businesses are in Texas, and what do they look like?
Texas has about 3.5 million small businesses, and small businesses employ 5.1 million Texans, 44.4% of the state's employees, according to the SBA's 2025 profile. About 494,000 of them have employees, and those are the ones that can buy a group plan.
| Size of business | Number in Texas |
|---|---|
| No employees | 3,023,525 |
| 1 to 19 employees | 435,158 |
| 20 to 499 employees | 58,660 |
| All small businesses (fewer than 500 employees) | 3,517,343 |
Of the Texas businesses with employees, 435,158 have 1 to 19 and 58,660 have 20 to 499. That split matters because federal COBRA only covers employers with at least 20 employees, so the Texas continuation rules covered below matter to the smaller group.
About 3.0 million Texas small businesses have no employees. Their owners buy individual plans, and our self-employed guide covers the deduction and enrollment dates.
How many Texas small businesses offer health insurance?
A little over one in four Texas establishments at firms with fewer than 50 employees offered health insurance in 2025 (28.2%), compared with 32.1% nationally. At firms with 50 or more employees, 91.2% did, compared with 94.8% nationally.
- Firms with fewer than 50 employees
- Firms with 50 or more employees
- TexasFirms with fewer than 50 employees: 28.2%Firms with 50 or more employees: 91.2%
- United StatesFirms with fewer than 50 employees: 32.1%Firms with 50 or more employees: 94.8%
Source: KFF State Health Facts, from the AHRQ Medical Expenditure Panel Survey Insurance Component, 2025
The survey counts establishments, meaning individual business locations. If a group plan does not fit your budget or your staff is spread across Texas, a CHOICE arrangement lets each employee buy a plan that fits where they live.
Which industries have the most Texas small employers?
Professional, scientific and technical services has the most Texas employers with 1 to 19 employees, at 67,955, followed by health care and social assistance at 49,503 and other services at 47,947.
| Industry | Businesses with 1 to 19 employees |
|---|---|
| Professional, scientific and technical services | 67,955 |
| Health care and social assistance | 49,503 |
| Other services (except public administration) | 47,947 |
| Construction | 46,770 |
| Retail trade | 44,237 |
| All industries | 435,158 |
Hours decide how staff count. Under the tax credit rules, seasonal workers who work 120 days or fewer in the year are left out of the hours and wages, and for the employer mandate part time hours are converted into full time equivalents.
What happens to an employee's coverage when they leave a Texas small business?
Federal COBRA covers employers with at least 20 employees, and Texas law adds a continuation right under insured group policies. A Texas employee or dependent who was continuously insured for at least three consecutive months can continue group coverage, for up to nine months if they are not eligible for COBRA.
- The person must ask the employer or group policyholder in writing within 60 days of the later of the date coverage ended or the date they were given notice of the right.
- The person pays the contribution the employer requires plus 2% of the group rate.
- If the person is not eligible for COBRA, coverage can continue for up to nine months after they elect it.
- If the person is eligible for COBRA, Texas continuation can add up to six more months after COBRA ends.
- A person whose coverage ended because of an involuntary termination for cause does not have the right.
Continued coverage can also end sooner, for example when similar benefits become available under another state or federal law. Ask your insurer to explain how continuation works on your plan before an employee leaves.
What does small business health insurance cost in Texas?
KFF does not publish premiums by state, so the closest figure for a Texas business is the South region, where the 2026 average premium is $9,272 for single coverage and $26,702 for family coverage. Both are a little lower than the averages for all firms nationally, $9,804 and $28,303.
Your price depends on your employees, their ages and where they live, and the plan level you choose. A quote is the only way to know it. Our cost guide explains who pays what and how to lower the bill.
How do I get started in Texas?
Count your team, decide your contribution, then compare a group plan with a fixed budget option. The rules in our national guide apply in Texas, and the numbers above show what is local.
- Count your full time and full time equivalent employees. Our free calculator does it for you.
- Decide how much of each employee's premium you want to pay.
- Ask for a side by side quote: a small group plan and, if you prefer a set budget, a CHOICE arrangement or QSEHRA.
- Check the Small Business Health Care Tax Credit. It is a federal credit, so it applies in Texas as it does everywhere.
If you are the only person in the business, or you work with only your spouse, you buy an individual plan instead. Our self-employed guide covers it.
See our Small-Group Health plans
Real health benefits for a small team. We handle shopping, setup and renewals.Small business health insurance calculator: employee count and tax credit
Enter your full-time and part-time employees to see your full-time equivalent count, which rules apply to you and what the small business health care tax credit could be worth.Health insurance in Texas
Marketplace, Medicaid and Medicare rules for the whole state.
Get group plan prices for your team
A licensed agent compares small group plans and CHOICE arrangements from several carriers and shows you the monthly cost for you and your employees. It costs you nothing.