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AUSTIN, TX — The Texas Association of Business (TAB) today applauded Governor Greg Abbott’s newly announced Essential Health Benefits proposal, which would give Texas employers the option to offer group health plans that satisfy all federal coverage requirements without the additional cost of state-specific benefit mandates. By expanding affordable coverage options, the proposal would help more small businesses compete for workers while reducing health insurance costs for employers and Texas families. The Governor’s office projects the proposal could save a typical Texas family approximately $1,145 annually and reduce small business health insurance costs by more than $3,400 per employee each year.

Texas ranks among the highest states in the nation for health care mandates that exceed federal requirements, and only 27% of small businesses are now able to offer their employees health coverage – a steadily declining figure. Meanwhile, 16.6% of Texans remain uninsured, the highest rate of any state in the country.

Rising health insurance costs continue to force many small employers into difficult decisions between offering health coverage, hiring additional employees, and investing in business growth. Providing employers with greater flexibility to offer federally compliant health plans can help reverse those trends by making coverage more affordable and accessible for both businesses and their employees.

TAB has advocated for this type of employer-choice option for several legislative sessions, including by supporting House Bill 139 by Chairman Jay Dean during the 89th Texas Legislature. The legislation would have created an optional employer-choice health plan that preserved all ten federally required Essential Health Benefits while allowing employers to forgo certain state-mandated benefits that increase premium costs.

“Texas employers have consistently made clear that the growing number of state health insurance mandates is driving up costs and undermining our state’s otherwise pro-business environment. Governor Abbott’s proposal addresses those costs by giving businesses a meaningful new option to provide affordable, federally compliant coverage. More affordable coverage means more employers can offer health insurance, more Texans can gain coverage through their jobs, and our small businesses can remain competitive. TAB has advocated for greater employer flexibility in health coverage and fewer state-mandated coverage requirements for several legislative sessions, and we look forward to working with the Governor and Legislature to get this across the finish line in 2027.”

— Gabriela von zur Muehlen, SVP & Chief Policy Officer, Texas Association of Business

TAB looks forward to working with lawmakers during the 2027 legislative session to advance reforms that expand affordable coverage options, reduce costs for employers and families, strengthen Texas’ workforce, and preserve essential protections for patients.

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