Texas Small Employers Face Another Round of Steep Premium Increases, Average Family Coverage Cost Now Neared $27,000 a Year

As the 2027 plan year approaches, Texas small business owners are preparing for another round of group health premium increases, a trend that has pushed the average cost of employer-sponsored family coverage to nearly $27,000 a year, according to national survey data reviewed by Custom Health Plans, an independent health insurance brokerage based in Plano.

The most recent KFF Employer Health Benefits Survey found the average annual family premium reached $26,993, up 6 percent from the prior year, with single coverage averaging $9,325. KFF also reports that average family premiums have risen 26 percent over the past five years. For many small employers, health benefits now rank among their largest fixed costs after payroll, and the annual renewal has become one of the hardest line items to control. In fact, the rising cost of health care is expected to continue to pose a challenge for small business owners in the coming years.

The pressure is sharper in Texas than in most of the country. The state recorded the highest uninsured rate in the nation at 16.7 percent in 2024, or roughly 5.1 million residents, according to U.S. Census figures. Cost is a leading reason small employers scale back or drop coverage, leaving more workers to seek insurance on their own. This has led to a vicious cycle, where lack of access to affordable health insurance exacerbates the problem of rising premiums.

According to Richard J. Monello, President and CEO of Custom Health Plans, much of what small employers absorb each year comes down to how the renewal itself is handled. "The single biggest factor in how a renewal turns out is whether anyone actually shopped the market," Monello said. "A lot of small employers in Texas look at one quote a year instead of comparing several. That gap shows up in the renewal letter." Monello emphasized the importance of benchmarking current plans against multiple carriers and reviewing cost reduction options that may be available.

Monello said employers who benchmark their current plan against multiple carriers, and who review the cost reduction options they may qualify for, often find alternatives worth considering without cutting coverage. Federal options include the Small Business Health Care Tax Credit, Individual Coverage Health Reimbursement Arrangements (ICHRA), and Qualified Small Employer HRAs (QSEHRA). Separately, level funded plans, which are commercial insurance products rather than a federal program, can offer smaller employers a different funding structure than fully insured coverage. By exploring these options, small employers can potentially reduce their health care costs and avoid sacrificing coverage for their employees.

To help small employers benchmark their 2027 costs, Custom Health Plans is offering a no-cost review that compares an employer's current plan against options from carriers active in the Texas small group market, including Blue Cross Blue Shield of Texas, UnitedHealthcare, Aetna, and Cigna, and screens for the federal programs above. Because broker compensation is already built into plan pricing, the review carries no separate fee. This service is aimed at empowering small business owners with the knowledge and tools they need to make informed decisions about their health care costs.

About Custom Health Plans

Custom Health Plans is an independent health insurance brokerage based in Plano, Texas, serving small businesses, families, and individuals across Texas for more than 30 years. As an independent brokerage, the firm helps clients compare and enroll in coverage from carriers serving the Texas market, including Blue Cross Blue Shield of Texas, UnitedHealthcare, Aetna, and Cigna, along with Humana for Medicare and supplemental products. The firm specializes in group health insurance for small employers, individual and family coverage, Medicare planning, and supplemental benefits. Learn more at customhealthplans.com or call (469) 361-4032.