Bill > SB1949

This bill creates a tax incentive program for small employers (defined as businesses with 1-50 employees) who switch from traditional employer-provided health insurance to an Individual Coverage Health Reimbursement Arrangement (ICHRA). Under the bill, these employers can receive either a sales and use tax refund or a franchise tax credit of up to $400 per covered employee annually, contingent on the employer contributing an amount to the ICHRA equal to or greater than their previous health insurance contributions. To qualify, employers must adopt an ICHRA in lieu of a traditional health insurance plan and apply to the comptroller with requested documentation. However, an employer cannot claim both the sales tax refund and the franchise tax credit in the same year. The bill will take effect on January 1, 2026, with the first applications for refunds or credits becoming available on January 1, 2027. The goal appears to be encouraging small employers to offer more flexible health coverage options while providing financial incentives for doing so.

Budget and Finance

https://capitol.texas.gov/BillLookup/History.aspx?LegSess=89R&Bill=SB1949