If you run a small business, there are two common ways to help your team with health insurance: a traditional group plan, or reimbursing employees toward individual plans they pick. Which one works depends on your business and your people.
A traditional group plan
The business buys one plan and employees enroll in it. The business usually pays part of the premium, and carriers set rules about how many people must participate.
- Generally you need at least one employee who isn't the owner or the owner's spouse.
- Carriers often require a minimum share of eligible employees to enroll.
- Premiums for a group are priced from the group, so one employee's health can affect the quote.
Reimbursing employees for individual plans
Instead of one group plan, some employers set up a health reimbursement arrangement that pays employees back for individual health insurance they choose themselves. Rules around who can use it and how it's set up vary, and it's worth talking to a tax professional or benefits advisor before you start.
If it's just you
A business with only the owner generally can't buy a group plan, so the usual route is an individual plan. Many owners can deduct premiums on their taxes. Ask your tax professional how that applies to you. Our self-employed page goes through the options.
Do you have to offer coverage?
Federal rules that require employers to offer coverage generally apply to employers with about 50 or more full-time equivalent employees. Most small businesses fall below that, so offering benefits is typically a choice. We can help check what applies to you.
What to find out first
- How many employees are eligible, and how many are likely to enroll?
- What can you afford to contribute each month?
- Do your employees mostly want broad doctor choice or lower cost?
- Would a mix of plans fit better than one?
This article is general information, not a guarantee of coverage or pricing. Plan availability, benefits, and eligibility vary by state and individual. Some private plans are medically underwritten and do not include all ACA essential health benefits.