Small Business

Small Business Health Insurance in Washington State (What You Need to Know)

Updated on December 02, 2019


With a total uninsured rate of just 7 percent, Washington State is well ahead of the national average on coverage.

This is a high standard, and as a small business you don’t want to fall behind—group health insurance can make your business a desirable place for quality employees to want to work, and the benefits of small group plans don’t stop there.

34 percent of small businesses in Washington State offer group health insurance 

Just like the impressive low percentage of uninsured people in Washington state, there is an impressive amount of small businesses who already offer group health insurance. As in most states, small businesses play a critical role in providing health insurance to Washingtonians. But there are some unique features of small business health insurance in Washington State, namely:

  • Widespread Small Business Coverage– Washington State is notable for having a large percentage of businesses that provide small group health insurance for their workers. According to the Small Business Administration, 34 percent of businesses with fewer than 10 employees offer small business health insurance in Washington State; in most other states, fewer than 30 percent of such businesses do this. Likewise, among firms with between 10 and 24 employees, 64 percent provide small group health insurance in Washington; for firms with between 25 and 99 employees, this figure rises to 84 percent.
  • Income Tax Irrelevance– Many states use income tax breaks to help individuals cover their premiums for small group health insurance plans and other forms of coverage. But because Washington does not have an individual income tax, this is not a feature of small group health insurance here. Among other things, this means individuals who enroll in small business health insurance in Washington State might not have to go through as much trouble on their taxes.

What is the Health Insurance Partnership in Washington?

One of the ways that Washington has achieved such widespread coverage and high rates of health is through the Health Insurance Partnership. Also known as HIP, this program is designed to help small employers with limited resources afford small business health insurance in Washington State. It is notable for the following features:

  • Small Business Eligibility– According to the Small Business Administration, the HIP program is only available to small companies, which it defines as those that have between two employees and 50. Such businesses also need to pay an average wage of $10 an hour or less, and cannot have already extended insurance to their employees. These requirements ensure that the state is focusing its resources on businesses that need the most help, rather than subsidizing those who might have an easier time supplying group health insurance coverage on their own.
  • Premium Support– When a business enrolls in the HIP program, the State of Washington offers a subsidy to each of its employees, which covers part of the cost of their small group health insurance plans. The size of each employee’s subsidy is calculated based on his or her family income.
  • Cafeteria Plans– Besides receiving subsidies, employees who receive coverage through small group health insurance plans in this program may use cafeteria plans. These allow them to exempt part of their income from taxes if they plan to use that income to pay for small business health insurance in Washington State.

eHealth is committed to helping all businesses extend quality health coverage to their employees. For more information on small business health insurance in Washington State, visit our website today.

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