Blue Cross Blue Shield of Texas Small Group Plans: Fully Insured and Level-Funded (2026)
Blue Cross Blue Shield of Texas small group plans come two ways, because BCBSTX writes both fully insured and level-funded coverage. Its fully insured ACA plans cover groups of up to 50 employees, and its level-funded product, Blue Balance Funded, covers groups of 5 to 50 enrolled employees in 2026. Both run on the same two networks, Blue Choice PPO and Blue Advantage HMO.
We are an independent benefits broker in Corpus Christi, licensed statewide. We quote all major carriers and several regional ones on the same census, with BCBSTX run both ways. Our broker cost to the employer is $0. 40 Google reviews.
Fully insured or level-funded: how BCBSTX prices each
BCBSTX describes its fully insured premium as fixed and based on age and ZIP code, not on your employees' health. The carrier carries the claims and keeps any money left at year end. Blue Balance Funded is underwritten. BCBSTX sets the rate on the health of the group and offers composite rates only, so everyone in a coverage tier pays the same rate regardless of age. The payment has three parts: administrative costs, projected claims funding, and stop loss coverage.
| Fully insured | Blue Balance Funded | |
|---|---|---|
| Group size in 2026 | Up to 50 employees | At least 5 enrolled, no more than 50 eligible |
| How the rate is set | Age and ZIP code | Health of the group, composite rates |
| Claims above forecast | Carrier pays | Stop loss pays, the group is not billed |
| Claims below forecast | Carrier keeps it | Possible credit for half the savings |
| Pediatric dental and vision | Included | Not required |
| Prior group coverage | Not required | 12 months |
A level-funded quote can come in under the fully insured quote or above it, because it follows the group's claims forecast. Level-funded vs fully insured health insurance in Texas covers the tradeoffs.
Blue Choice PPO or Blue Advantage HMO
BCBSTX calls Blue Choice PPO a broad, statewide PPO and Blue Advantage HMO a smart, statewide HMO. Both small group products use both networks.
| Blue Choice PPO | Blue Advantage HMO | |
|---|---|---|
| Primary care doctor | Not required | Required |
| Specialist referral | Not required | Required |
| Out-of-network benefits | Yes | No, except emergencies |
| BlueCard access | Yes | No, except emergencies |
| Where members live or work | No specific requirement | Inside the network service areas |
The trade is freedom against structure. The PPO fits a team that travels or lives across several counties. The HMO asks members to start with a primary care doctor and stay in network. A network name is not a hospital list, so we confirm your employees' hospitals and doctors on the exact plan before you pick one.
Who qualifies for Blue Balance Funded
BCBSTX sets small group status on the average number of employees, including part-time and seasonal staff, on business days in the prior calendar year. A plan starting February 1, 2026 is judged on 2025. Blue Balance Funded then adds rules that fully insured plans do not:
- an ERISA-qualifying small group with good financial standing and no history of delinquencies
- at least 12 months of previous group coverage
- at least 5 enrolled employees, or 75% participation, whichever is greater, up to 50
- an employer contribution of at least 50% toward the lowest-cost employee-only plan
- at least 75% participation, minus valid waivers
The floor was 10 enrolled for 2025, so the drop to 5 opens level-funded to smaller shops. On 10 eligible employees, 75% is 7.5 people, so participation sets the bar, not the 5 minimum. The 12-month rule stops a new business cold. A first-time group starts on fully insured and can ask for level-funded at its first renewal, subject to underwriting. The Texas 75% participation rule shows how valid waivers change the count.
How the level-funded payment and credit work
The monthly payment stays level. If claims run past the forecast, stop loss pays the excess, and BCBSTX says the group is not responsible for those costs. If claims come in under, the group may get a credit for half of the savings toward future payments. BCBSTX's own example: claims $200 under forecast can mean a $100 credit. For 2026 contracts, that credit goes only to groups that stay in Blue Balance Funded. Cancel or move to fully insured and the surplus is gone. Contracts run 12 months, and each year BCBSTX decides whether to renew level-funded or move the group back to fully insured. What level-funded health insurance is covers the mechanics across carriers.
What a BCBSTX level-funded group takes on
Level-funded moves work to the employer. BCBSTX says the group owns its PCORI fee, which the IRS collects on Form 720, and its 1095 forms. Groups can offer up to three plans, and dental is a separate fully insured product. A group 30 days past its payment due date is cancelled, cannot be reinstated, and has to move to fully insured. State continuation is not available. Federal COBRA generally applies only to employers with 20 or more employees, per the U.S. Department of Labor, and Texas state continuation under Insurance Code Chapter 1251 usually covers smaller insured groups. Under 20 employees, settle how a departing employee keeps coverage before you sign.
What BCBSTX small group coverage costs
Full single medical runs about $625 to $680 per employee per month in 2026, using our published planning band. At a 50% employer contribution to employee-only, the employer share is about $313 to $340 per enrolled employee per month. Ten enrolled employees on single coverage puts the employer around $3,130 to $3,400 a month. Level-funded can land about 15% to 30% under a comparable fully insured quote when the group underwrites well, and it can also price higher. These are planning numbers, not BCBSTX rates. Group health insurance cost for Texas small business shows how contribution and enrollment change the total.
Carrier commission is already built into the published rate whether a group uses a broker or buys direct. On a level-funded quote, we set our PEPM, our per employee per month amount, in the quote, and it sits inside the monthly carrier payment. It is never a separate bill.
How we quote BCBSTX and when coverage can start
Send dates of birth, home ZIP codes, and the business address. We return BCBSTX fully insured and, when the group qualifies, Blue Balance Funded side by side, usually in about 48 hours, with major and regional carriers on the same census. Level-funded usually needs a health questionnaire. A Texas small group can start coverage on the 1st of any month. The November 15 to December 15 window applies only to groups that cannot meet the participation or contribution minimums, under the federal rule at 45 CFR 147.104. Setup takes about 3 to 4 weeks.
Frequently asked questions
Does Blue Cross Blue Shield of Texas offer level-funded plans for small groups?
Yes. Blue Cross Blue Shield of Texas writes both fully insured and level-funded small group plans. Its level-funded product, Blue Balance Funded, is open in 2026 to groups with at least 5 enrolled and no more than 50 eligible employees. Its fully insured ACA plans cover groups of up to 50.
How many employees does a business need for a BCBSTX small group plan?
BCBSTX fully insured small group plans cover groups of up to 50 employees. Blue Balance Funded needs at least 5 enrolled employees, or 75% of eligible employees, whichever is greater, with no more than 50 eligible. BCBSTX counts the average employees on business days in the prior calendar year.
Can a new business with no prior coverage get BCBSTX level-funded?
No. BCBSTX requires 12 months of prior group coverage before it will quote Blue Balance Funded. A business buying its first group plan can start on a BCBSTX fully insured plan and ask for a level-funded quote at its first renewal, subject to underwriting on the group's health.
When can BCBSTX small group coverage start?
A Texas small group can start BCBSTX coverage on the 1st of any month, and Blue Balance Funded also starts only on the 1st. The November 15 to December 15 window applies only to groups that cannot meet participation or contribution minimums. Setup usually takes about 3 to 4 weeks.
The short answer
BCBSTX small group plans come two ways. Fully insured ACA plans cover up to 50 employees, and Blue Balance Funded covers 5 to 50 enrolled employees with 12 months of prior group coverage. Both use Blue Choice PPO or Blue Advantage HMO. Coverage can start on the 1st of any month. Our broker cost to the employer is $0. Groups 2 to 250+. We do not cap.
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