Small Business Health Insurance for Employees in Multiple States

Small Business

Small Business Health Insurance for Employees in Multiple States

Published on May 08, 2019


As a small business owner with employees in multiple states, you may have questions about providing health insurance to your multistate workforce. Continue reading to learn about the group health insurance options available to your small business and employees in multiple states.

Can a small business health insurance plan cover employees in multiple states?

A small business owner with employees in multiple states has multiple options for offering health insurance:

  • health insurance through one national group health plan
  • multiple separate state plans
  • a health reimbursement arrangement (HRA) account.

Providing one national group health plan to employees in multiple states

One health insurance option you may consider is offering a single national group health plan to all of your employees in multiple states. Selecting one national group health plan provides your small business with the convenience of not having to manage or keep up with the different rules, laws, and regulations that multiple states have regarding health insurance.

  • With one national group health plan, each of your employees across multiple states gets the same health insurance coverage no matter where they live.
  • Only a small number of health insurance companies have national group health plans, meaning that there is a more limited selection of plans available which may have higher prices.

Providing state plans to employees in multiple states

Another health insurance option that might work for your small business is offering multiple state plans to your employees who work in different states. Having a separate state plan for each state your workers are located in may allow them to have group health plans that better fit their coverage preferences and medical needs.
One factor to keep in mind is that your selection of health insurance options may vary depending on which health insurance companies offer coverage in each state. For example, consider the Small Business Health Option Program (SHOP) Marketplace, which helps small business owners provide health insurance to their employees. While SHOP plans are widely available in most states, they are not available as an insurance option in every state; some states have their own health care exchanges.
Also, when comparing the small business health insurance plans that are available for your state, you should be sure to look into which medical providers are available within a particular carrier’s network.

Offering a small business HRA to employees in multiple states

A small business health reimbursement arrangement (HRA) is a form of health insurance that employers can offer to their employees in multiple states. HRAs allow small businesses to create reimbursement accounts with fixed allowances on behalf of their workers. Employees then purchase their own individual or family health insurance plans and use the employer-provided allowance funds in their HRA accounts to pay for premiums and certain out-of-pocket costs.
An HRA might work for an employer with employees in multiple states since the monthly HRA allowance your business sets is fixed and the same for all your employees, regardless of which state they work in. The other multistate advantages of choosing an HRA for your business health insurance include allowing your employees to choose the level of health care coverage that works for them and a more straightforward way to manage the administrative side of health insurance.

Health insurance for employees in multiple states: the next steps

Ultimately, the health insurance options you choose for your multi-state employees will depend on the cost and coverage preferences of you and your workforce. Flexibility in choosing policies and the local availability of health insurance companies in each state are also important factors for your small business to consider. Overall, you should know that you have several effective options to choose from when offering health insurance to your employees in different states.
For more information about Health Reimbursement Arrangements for small businesses, speak with an accountant or a legal or tax advisor. To learn more about your small business health insurance options today, visit or speak to one of our licensed health insurance agents.
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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