Best Small Business Health Insurance Plans 2024
Blue Cross Blue Shield stands out as the best health insurance company for small businesses because of its range of coverage options. The company offers a nationwide preferred provider organization (PPO) network and extra benefits for employees, including an extensive discount program.
Depending on your state, you may have a few options for finding health coverage for your employees, including through the Small Business Health Insurance Options Program (SHOP)—a government marketplace for small business health plans—and by purchasing a traditional group health plan from a broker or directly from an insurer.
To choose the best health insurance companies for small businesses, we evaluated major health insurance carriers based on financial strength, customer satisfaction, coverage options, telehealth and wellness benefits, digital tools, and more. These are our top picks.
Understanding Small Business Health Insurance
Health insurance, often named as mediclaim, is insurance coverage against medical conditions and treatments covered under the policy. Usually, health insurance covers the expenses incurred during a medical emergency. It protects the financial assets of the policyholders and helps them get the best possible medical care. Small business health insurance is a type of group health insurance policy taken by businesses to provide medical coverage to their employees.
This health policy is good for budding businesses that want to provide medical aid to their workforce without disturbing their budgets. Further, it also helps businesses fight medical burdens caused to their employees due to unforeseen circumstances.
Small Business Health Insurance Costs
According to KFF1, annual premiums for group health insurance in 2023 average $8,435 a year for single coverage—roughly $703 monthly—and $23,968 a year for family coverage, which is about $1,997 per month. The average annual premium for single coverage and family coverage each increased by 7% over the last year.
Monthly premiums also run higher for certain types of health insurance, like preferred provider organization (PPO) plans and health maintenance organization (HMO) plans. The average cost for single coverage and family coverage is also more expensive in the Northeast and Midwest regions of the United States and in specific industries like transportation, communications, and utilities.
Organizations can reduce their budget by implementing higher cost-sharing requirements for employees. However, adding these requirements increases the risk that eligible employees will decline participation in the plan.
If too many employees choose not to participate, the organization may not be able to offer the policy at all. A health insurance company typically requires at least 70% of employees to participate in a group health plan.
What Are My Small Business Health Insurance Options?
Small employers (generally those with 2–50 full-time employees1) may be eligible to purchase through the Small Business Health Options Program (SHOP) Marketplace. Created through the Affordable Care Act (ACA), SHOP offers affordable and flexible plan options to small businesses. If you do not qualify or there are no SHOP plans available in your area, you can also find a small business health insurance plan through a licensed broker or through an insurer like Anthem.
How Does Small Business Health Insurance Work?
Group health insurance for small businesses functions similarly to that of larger corporations and businesses. However, this insurance policy is for a smaller group of employees. The organisation takes out this policy for their employees. In the event of a medical crisis, employees can rely on the coverage provided by this organisation.
This health insurance policy is available to businesses year-round. Usually, after buying the small business health insurance, premiums are locked in for a year. In that period, employers can add new employees to the plan. Not just this, employers can also remove the employees from plans that no longer work in their organisation.
At the end of the insurance coverage, the employer can renew the plan or go for any other group health insurance policy that aligns with their business needs.
How Many Employees Do You Need To Offer Small Business Health Insurance?
The number of employees is just one of four requirements to qualify your business for small group health insurance. You must generally:
- Have 2–50 full-time employees (other than spouses, family members, or partners).
- Offer coverage to all full-time employees working 30 or more hours per week.
- Enroll at least 70% of the employees in your insurance plan.
- Have a physical work site within the state where you purchase your plan.
What Types Of Small Business Health Insurance Plans Are Available?
As a small business owner, you can choose from five types of healthcare plans for your business.
HMO (Health Maintenance Organization)
An HMO is designed to keep costs low and predictable by only using doctors and hospitals within the HMO network. It typically has low premiums, deductibles, and fixed copays for doctor visits. Primary care physicians (PCP) are the primary point of contact for all medical care, including specialty referrals.
PPO (Preferred Provider Organization)
PPO networks let you choose where to go for care, without a referral from a PCP or having to only use providers in your plan’s provider network. These plans typically have higher monthly premiums and out-of-pocket costs like copays, coinsurance, and deductibles.
EPO (Exclusive Provider Organization)
An EPO offers a local network of doctors and hospitals to choose from. If you’re looking for lower monthly premiums and are willing to pay a higher deductible when you need healthcare, you may want to consider an EPO plan.
POS (Point of Service)
A POS plan requires that you get a referral from your PCP before seeing a specialist. This plan covers out-of-network doctors at a higher out-of-pocket cost than in-network doctors.
HDHP (High Deductible Health Plan)
An HDHP has low premiums but higher immediate out-of-pocket costs. Employers often pair HDHPs with a Health Savings Account (HSA). This is a tax-free fund used to offset costs such as deductibles.
Best Health Insurance Companies for Small Businesses for July 2024
- Best Overall: Blue Cross Blue Shield
- Best for Customer Satisfaction: Kaiser Permanente
- Best for Part-Time and Seasonal Workers: UnitedHealthcare
- Best for Self-Funded Plans: Aetna
Blue Cross Blue Shield
Overview
Blue Cross Blue Shield, which is also our pick for the best health insurance company overall, offers employers many options. Among them are plans that include access to the BlueCard PPO network, which gives employees coverage when traveling nationwide. In some states, BCBS offers fully insured, level-funded, and self-funded plans. Blue Cross Blue Shield is a group of companies, so benefits and plans vary by region, but many member companies offer extra benefits.
For example, the member company Anthem provides an employee assistance program at no extra cost to help members manage stressful events, from legal issues to the search for care. In many states, BCBS plans also come with 24/7 telehealth and access to mobile app plan management. Most members also get access to Blue365, an extensive discount program that also offers a $25 gym membership in some states.
BCBS and Anthem companies had a combined average of 3.5 stars out of 5 stars from the National Committee for Quality Assurance (NCQA), an independent body that judges insurance plans on the quality of their providers, as well as customer satisfaction. But customer satisfaction ratings vary by region. Check the 2023 J.D. Power U.S. Commercial Member Health Plan Study to see how BCBS fared in your region. While rankings are poor in many regions, BCBS was top-ranked in Florida.
Why We Chose It
Blue Cross Blue Shield (BCBS) offers flexible options to small business owners, including the option to access the nation’s leading PPO network. In many states, BCBS employee plans come packed with extra benefits, and most plans include an extensive discount program.
Pros & Cons
Pros
- Nationwide availability
- Health and wellness discounts
- Workplace wellness programs in many states
Cons
- Poor J.D. Power ranking in some regions
Kaiser Permanente
Overview
Kaiser Permanente has better customer satisfaction ratings than any of the major health insurance providers we reviewed, with a 4.2-star average NCQA rating and top J.D. Power rankings in four regions.
J.D. Power. “Commercial Health Plan Member Satisfaction Declines in Key Areas, J.D. Power Finds.”
The company offers employers many options. While Kaiser is known for its health maintenance organization (HMO) plans, it also offers preferred provider organization (PPO) plans. Employees can pair some plans with a Kaiser-administered health reimbursement arrangement (HRA), health savings account (HSA), or flexible spending account (FSA). Members can even submit HRA and FSA claims using their mobile phone cameras.
Free wellness coaching is included at no cost. Members who are at risk for chronic conditions are automatically enrolled in a disease management program with comprehensive support and remote patient monitoring. And Kaiser offers several additional employee benefits, including dental, vision, acupuncture, and chiropractic. Kaiser is also our top pick for the best digital tools, with an award-winning app, 24/7 virtual care, mental health apps, and online physical therapy.
Why We Chose It
Kaiser Permanente has top customer satisfaction ratings from the NCQA and J.D. Power, along with an award-winning app and a suite of virtual care options.
Pros & Cons
Pros
- 4.2-star average NCQA rating
- Top-ranked by J.D. Power in most regions where available
- Administers HRAs, HSAs, and FSAs
- Robust support for chronic conditions
Cons
- Only available in eight states and D.C.
The advantages of health insurance for small business owners
Here are the advantages of health insurance for small business owners.
- Attracting and Retaining Talent: Offering health insurance as part of the employment package can attract top talent to your small business. It demonstrates that you care about your employees’ well-being, which can make your company an attractive choice for prospective employees.
- Enhancing Employee Morale and Productivity: When employees know that their health is taken care of, they tend to be more focused and productive at work. Health insurance can reduce stress and anxiety about medical expenses, allowing your employees to concentrate on their tasks.
- Tax Benefits for the Business: Premiums paid towards group health insurance are eligible for tax deductions under Section 80D of the Income Tax Act under the old regime. This benefit can significantly reduce your business’s tax liability, thereby freeing up funds for growth and development.
- Financial Security for Employees: Health insurance provides your employees with financial security in case of medical emergencies. They can access quality healthcare without worrying about the financial burden, leading to better recovery and well-being.
- Compliance with Legal Requirements: Under the Employee State Insurance Act, 1948, and various state labour laws, businesses with a certain number of employees are required to provide health insurance coverage. Complying with these legal requirements is crucial to avoid penalties and legal complications.
What Is The Average Cost Of Small Business Insurance?
The cost of small business health insurance will depend on the type of plan or plans you want to provide as a small business owner. You will need to think of how much coverage is needed for your employees. Consider premiums, out-of-pocket costs, and provider networks when comparing plans.
How Can I Lower My Small Business Health Insurance Costs?
Under the Affordable Care Act, employers who have fewer than 25 full-time employees, who pay average wages of $56,000 or less, or who cover at least half of their employees’ premiums may be eligible for tax credits for their small group health insurance plans. These tax credits can help lower the cost of your small business health insurance.
When Can I Enroll In A Small Business Health Insurance Plan?
There is no limited enrollment period for small business health insurance and employers can shop for a new plan any time of year. If you enroll in a plan by the 15th of each month, coverage can usually begin on the 1st of the following month.
The Bottom Line
For 2024, Blue Cross Blue Shield (BCBS) is the top choice for small business health insurance, offering extensive coverage options, a nationwide PPO network, and employee benefits like a discount program. Other top picks include Kaiser Permanente for customer satisfaction, UnitedHealthcare for part-time and seasonal workers, and Aetna for self-funded plans.
Small business health insurance is a group policy providing medical coverage to employees, crucial for attracting talent, enhancing productivity, and complying with legal requirements. The average annual premiums in 2023 were $8,435 for single coverage and $23,968 for family coverage, with costs varying by plan type and region.