Compare Small Business Health Insurance Plans

Small business health insurance is group coverage an employer purchases to cover employees and their dependents. Unlike individual health plans bought on the marketplace, group plans spread risk across all enrolled employees — which typically results in lower per-person premiums than employees could get on their own.

Under the ACA, businesses with 1-50 full-time equivalent employees are considered the "small group" market. You can purchase through the federal SHOP marketplace (which unlocks a potential tax credit) or directly from a carrier or licensed broker.

The most common options for small employers:

• PPO (Preferred Provider Organization): Employees can see any in-network provider without a referral, and out-of-network care is covered at a reduced rate. Most flexible, highest premiums.
• HMO (Health Maintenance Organization): Employees pick a primary care physician who coordinates all care. Lower premiums, smaller network. Best when your employees are concentrated in one geography.
• HDHP + HSA: High-deductible plan paired with a Health Savings Account employees can fund pre-tax. Popular with younger, healthier workforces who want to build long-term savings.
• Level-funded plans: A hybrid of self-insured and fully-insured coverage. You pay a fixed monthly amount; unused claims dollars are returned at year end. Requires stop-loss insurance.
• QSEHRA: Not a health plan itself — it's a reimbursement arrangement that lets you pay employees back for their own individual plans, tax-free, up to IRS limits.

Expect to pay $300–$700 per employee per month for single coverage on a typical small group plan, before the employee contribution. Family coverage runs $800–$1,600 per month. Costs vary significantly by:

• Location — premiums vary by state and even county.
• Average employee age — older workforces pay higher rates on small group plans.
• Plan tier — Bronze costs less than Gold; HDHP options are typically cheaper than traditional PPOs.
• Number of employees — more employees means more statistical predictability and can lower per-person rates.

Most employers cover 50-80% of the employee-only premium. Covering dependents is optional but a strong recruiting benefit.

Yes — if you qualify. The ACA Small Business Health Care Tax Credit covers up to 35% of employer-paid premiums (50% for nonprofits) if you:

• Have fewer than 25 full-time equivalent employees.
• Pay average annual wages below $56,000 per employee (2026 threshold).
• Pay at least 50% of employee-only premium costs.
• Purchase coverage through the SHOP marketplace.

The credit phases out as wages and employee count rise above the thresholds. Businesses with 10 or fewer employees earning under $28,000 on average get the maximum credit. Run the numbers with a tax advisor — for qualifying small employers the credit can offset a significant share of year-one costs.

The process in five steps:

1. Count your eligible employees. Full-time equivalents (FTEs) determine your eligibility for SHOP and the tax credit. Part-timers count as fractions of FTEs.
2. Decide how much you can contribute. Most plans require employers to pay at least 50% of employee-only premiums. Decide your budget before comparing plans.
3. Choose a plan type. PPO for flexibility, HMO for cost control, QSEHRA if you want maximum simplicity and have fewer than 50 employees.
4. Compare carriers. Rates, networks, and drug formularies differ significantly. Use a licensed broker or marketplace to see plans side-by-side.
5. Set your enrollment period. Work with the carrier to define the employee enrollment window (usually 30 days) and a waiting period (up to 90 days max under ACA).