Relating to a refund of sales and use taxes or a credit against the franchise tax for certain small employers who contribute to an individual coverage health reimbursement arrangement.

SB 1949 provides a state tax refund for small Texas employers (1-50 employees) who switch from traditional group health insurance to an individual coverage health reimbursement arrangement (HRA). Eligible employers receive a refund equal to $400 per covered employee annually, capped at their total state business taxes paid that year. To qualify, employers must contribute at least the same annual amount per employee they previously paid for traditional group insurance (or the minimum required for any available group plan if they never had one). The refund applies to sales/use taxes or franchise tax, but excludes businesses claiming other franchise tax credits during the same period. This policy directly affects small businesses seeking cost-effective health coverage options for their employees.