Small Business Health Insurance: Can a Business with Two Employees Get Covered?

Small Business

Small Business Health Insurance: Can a Business with Two Employees Get Covered?

Published on March 30, 2018


Updated July 30, 2019
Do you run a company with only two employees, including yourself? You may be surprised to find that you don’t need as many employees as you thought in order to get small business health insurance (also known as group health insurance). Knowing the small business definition within the health insurance world might give you some insight as to whether or not you can get a group plan to cover yourself and your employee. Read on to learn about the small business definition and see if your two-person small business can get group health insurance.

Small business definition

In the eyes of health insurance, small businesses generally have at least one employee. This often means, at least one owner and one full-time equivalent employee, or common law employee. In its most basic terms, a common law employee means someone who works for you at least 30 hours per week, and is not your spouse. So unfortunately, if your two-person business is just you and your spouse, you will most likely need to shop for family health insurance instead of small business health insurance. However, if you have two employees besides yourself, and one of them is not your spouse, then you may be able to qualify for a group health insurance plan.
You also must be able to provide proof that you are a small business, specifically meaning you have proof of annual revenue. Read about other information you’ll need in order to get small business health insurance, and how you can prepare before you sign up.

What is small business health insurance?

Let’s start with the basics. There are two main types of health insurance:

  1. Individual & Family plans
  2. Group plans (mainly for businesses)

As the name suggests, individual health insurance is a plan purchased by one person for themselves and their family. Most people will qualify to buy individual health insurance through a health insurance marketplace or through a broker, either online or local.
Group plans purchased as small business health insurance mean the business’s employees, including the small business owner, are eligible to be covered under the health insurance plan bought by the owner. Small business health insurance is not available to some businesses because they don’t meet the criteria. If your company meets the small business definition required by health insurance companies, then getting a small business health insurance plan to cover your employee, or employees, is a great way to boost employee loyalty and retention, and possibly get lower monthly premiums per individual.
Get more information on how small business health insurance works by watching this video.

Details about small business insurance

Again, the key to the small business definition when it comes to buying small business health insurance is the number of employees. To qualify for small group health insurance, your company typically needs at least two employees including the owner. In other words, a small business owner who employs just one other full-time employee typically meets the employee limit under the small business definition, and might be able to get a group plan.
Although a company of this size is generally not required to offer insurance benefits to that one full-time employee, buying group health insurance may allow both the owner and staff member to save money. Since owners are counted as employees, it is worth contacting a licensed insurance broker to see if your company meets the definition of a small business and if a group plan is the best option, even if you only have one employee. Visit to get free quotes and see the insurance plans you qualify for.

What are the benefits of small business health insurance?

The most obvious benefit is better health insurance options. By buying a group insurance plan, your employees will likely save on their monthly premiums. There may also be tax benefits to buying a group plan and covering your employees.
Speak to a tax, accounting, or legal advisor to see if you may be able to qualify for tax incentives for giving coverage to your employee or employees. Employee requirements for each insurance plan can vary by insurance company or state.
This article is for general information and may not be updated after publication. Consult your own tax, accounting, or legal advisor instead of relying on this article as tax, accounting, or legal advice.

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