Small Business

What is small business health insurance?

Updated on November 30, 2019


Small business health insurance is coverage bought by small businesses to cover employees and their dependents.

There are three things that help distinguish small business health insurance from other types of coverage:

  • They made specially for small groups
  • You can shop for a new plan at any time of year
  • Employers must make contributions toward employee premiums

Let’s look at each of these in more detail:

Small business health insurance for small groups:

First, small business health insurance plans are typically tailored for groups of fewer than fifty.

Employers with fewer than fifty full-time workers (or the equivalent in part-time workers) are not required to offer coverage to their employees under the ACA.

Many small business policies cover groups of fewer than five or ten people. You may even be eligible for small business health coverage if your only employees in the past year were technically 1099 contractors.  Depending on the state, the insurance company, and the specific circumstances of your company, those 1099 contractors might count as employees for health insurance purposes.

Coverage any time of the year:

Second, you can purchase coverage at any time of the year.

With small business health insurance, you’re not forced to enroll during a special open enrollment period like you may be when buying coverage on your own.

Employers contributions toward employee premiums:

Third, with small business health insurance, the business is generally required to pay at least fifty percent of your employees’ monthly health insurance premiums. The exact percentage can vary by state or plan.

That said, it’s important to remember that the money you pay toward employee premiums is typically deductible from your business taxes.  Check with your accountant or tax advisor if you can save money this way.

To learn more about your small group health insurance options today, visit

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