Medcore warns Texas small businesses face a disability coverage gap

A McKinney brokerage is urging Texas employers to add short-term disability coverage before fall renewals, saying most small-firm workers have no state safety net and few get coverage at work. Medcore says the benefit can be one of the cheapest ways to protect workers and reduce employer claims risk.

Why it matters: - Texas has no state short-term disability program, so workers who cannot work because of surgery or injury may have no wage-replacement support unless an employer provides it. - Only 31% of workers at private employers with fewer than 100 employees have access to short-term disability coverage through work, according to the U.S. Bureau of Labor Statistics' March 2025 benefits survey. - Medcore Brokerage says that gap leaves many small businesses exposed to both employee financial strain and avoidable claims costs.

What happened: - Medcore Brokerage, a McKinney-based employee benefits brokerage, urged Texas small-business owners to review short-term disability coverage ahead of the fall renewal season. - Trey Driver, founder and president of Medcore Brokerage, said Texas owners often assume a state disability program exists, but the state pays nothing for a worker recovering from surgery who cannot do the job. - Driver said employers need to treat disability coverage as part of their core benefits strategy, not as an optional add-on.

The details: - Texas does not operate a state short-term disability program, unlike California, New York, New Jersey, Rhode Island and Hawaii. - Access to short-term disability coverage rises to 68% at private establishments with 500 or more workers, compared with 31% at firms with fewer than 100 workers, according to the Bureau of Labor Statistics. - Colonial Life, one of the carriers Medcore administers, recommends replacing about 60% of after-tax income. - Medcore said Texas employer-group quotes for short-term disability typically run 1% to 3% of an employee's income. - Small firms pay an average of $9,211 per employee per year for single health coverage and $26,054 for family coverage, according to KFF's Employer Health Benefits Survey. - Family premiums are up about 6% in the latest KFF survey. - 28% of workers at small firms face family-coverage contributions of $12,000 or more per year, according to KFF. - Medcore said standalone disability coverage can be offered even when a small employer does not offer a major medical plan. - Medcore ranks short-term disability among the most important benefits a Texas employer can offer. - Medcore published a plain-language guide explaining how Texas short-term disability coverage works, who qualifies and how long benefits last. - Medcore also published a companion resource on building employee benefits for small businesses in Texas on a small-business budget. - Medcore expanded South Texas resources for employers comparing group health insurance in Corpus Christi, Brownsville and Laredo.

Between the lines: - The brokerage is framing short-term disability as a low-cost way to fill a gap that Texas does not cover at the state level. - Medcore is also arguing that employers do not need a full benefits package to offer meaningful protection to workers. - Research published in Economic Inquiry in 2007 found that uninsured workers are more likely to file workers' compensation claims than insured workers, and those claims can affect an employer's experience modifier and future premiums. - Driver said a short-term disability plan can give an employee hurt outside work a place to turn while helping protect the employer's loss history. - Medcore is pushing the idea that disability coverage can help control renewal costs because it is often cheaper than other benefits. - Driver also warned that employers shopping too late can face steep renewal increases with few alternatives.

What's next: - Medcore says employers should start shopping 90 to 120 days before renewal. - The brokerage is encouraging owners to ask for disability quotes at the same time they compare other benefits. - Medcore expects more Texas employers to compare low-cost coverage options as fall renewal deadlines approach.

The bottom line: - In Texas, short-term disability is not a state backstop, and Medcore says small businesses can buy protection for far less than many owners expect.