Les MastersonDeputy Editor, Insurance
Les Masterson is a deputy editor and insurance analyst at Forbes Advisor. He has been a journalist, reporter, editor and content creator for more than 25 years. He has covered insurance for a decade, including auto, home, life and health. Before cove...
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Les MastersonDeputy Editor, Insurance
Les Masterson is a deputy editor and insurance analyst at Forbes Advisor. He has been a journalist, reporter, editor and content creator for more than 25 years. He has covered insurance for a decade, including auto, home, life and health. Before cove...
See Full Bio
Written By
Les Masterson
Les MastersonDeputy Editor, Insurance
Les Masterson is a deputy editor and insurance analyst at Forbes Advisor. He has been a journalist, reporter, editor and content creator for more than 25 years. He has covered insurance for a decade, including auto, home, life and health. Before cove...
See Full Bio
Les MastersonDeputy Editor, Insurance
Les Masterson is a deputy editor and insurance analyst at Forbes Advisor. He has been a journalist, reporter, editor and content creator for more than 25 years. He has covered insurance for a decade, including auto, home, life and health. Before cove...
See Full Bio
Deputy Editor, Insurance
Jason Metz
Reviewed
& 1 other
Updated: Jun 25, 2024, 8:57am
Editorial Note: We earn a commission from partner links on Forbes Advisor. Commissions do not affect our editors' opinions or evaluations.
Kaiser Permanente and Blue Cross Blue Shield scored the best in our analysis of small business health insurance. We evaluated large insurance providers that offer ACA marketplace plans to find the best health insurance companies across the country.
Providing health insurance can help a small business attract—and keep—employees. One way small businesses can buy health coverage is through the Affordable Care Act (ACA) marketplace.
Read more
Find The Best Health Insurance
- Best Affordable Health Insurance
- Best Dental Insurance
- Best Disability Insurance
- Best Health Insurance
- Best Short-Term Health Insurance
- Best Vision Insurance
Show Summary
- Summary: Best Health Insurance for Small Business Owners
- How Does Small Business Health Insurance Work?
- Types of Health Insurance Companies for Small Businesses
- How Much Does Health Insurance for Small Business Cost?
- How to Compare Small Business Health Insurance Plans
- How to Get Health Insurance for a Small Business
- Methodology
- Other Health Insurance Companies We Rated
- Small Business Health Insurance Frequently Asked Questions (FAQs)
- Next Up In Health Insurance
Summary: Best Health Insurance for Small Business Owners
Editor's Take | Company | Company - Logo | Forbes Advisor Rating | Forbes Advisor Rating | Learn More CTA text | Learn more CTA below text | LEARN MORE |
---|---|---|---|---|---|---|---|
Best Quality | Kaiser Permanente | 5.0 | See Plans | On Healthcare.com's Website | |||
Best Provider Network | Blue Cross Blue Shield | 5.0 | See Plans | On Healthcare.com's Website | |||
Best for Breadth of Insurance Options | UnitedHealthcare | 4.6 | See Plans | On Healthcare.com's Website |
How We Chose the Best Health Insurance For Small Business Owners
BEST QUALITY
Kaiser Permanente
5.0
Our star ratings are based on a range of criteria and are determined solely by our editorial team. See our methodology for more information.
Plans offered to small businesses
HMO, POS, PPO
Other coverage offered
Dental (in California) and vision
Provider network
More than 23,900 physicians in 39 hospitals and 622 medical facilities
On Healthcare.com's Website
HMO, POS, PPO
Dental (in California) and vision
More than 23,900 physicians in 39 hospitals and 622 medical facilities
Editor's Take
We like Kaiser Permanente’s superior quality ratings, excellent average deductibles for silver plans and that it offers four different types of metal tiers on the ACA marketplace. That combination could make an excellent choice if you’re buying coverage for your small business.
Pros
- Operates an integrated health system, which means the medical providers and health plans work for the same company, which can reduce potential claims problems.
- Doesn’t charge businesses extra for offering multiple types of health plans.
- Excellent health insurance costs compared to other insurers analyzed.
- Kaiser Permanente has the best average ACA plan ratings of the insurers we reviewed.
More: Kaiser Permanente Health Insurance Review
Cons
- Only available in eight states and Washington, D.C.
- Finding a provider that accepts Kaiser Permanente may be a problem if members are in states that the company doesn’t serve.
- Consumer complaints to state insurance commissioners are higher than the industry average.
Marketplace Health Plan Availability
- California
- Colorado
- Georgia
- Hawaii
- Maryland
- Oregon
- Virginia
- Washington
- Washington, D.C.
Best Provider Network
Blue Cross Blue Shield
On Healthcare.com's Website
EPO, HMO, POS, PPO
Dental, life, vision
Over 1.7 million healthcare providers
Editor's Take
Blue Cross Blue Shield, which is made up of 33 independent insurers, has excellent quality ratings and lower-than-average silver plan deductibles. Another positive we like is the company’s large provider network and availability of Blue Cross coverage in all states.
Pros
- Large provider network means you should have an easier time finding a doctor if you’re traveling.
- Available nationwide.
- Offers all four metal tiers (bronze, silver, gold and platinum).
- Provides four types of health plans to small businesses (can vary by Blue Cross company).
More: Blue Cross Blue Shield Health Insurance Review
Cons
- Consumer complaints to state insurance commissioners are slightly above average compared to the rest of the industry.
- Higher ACA marketplace premiums than competitors analyzed.
Marketplace Health Plan Availability
- All 50 states and Washington, D.C.
Best for Breadth of Insurance Options
UnitedHealthcare
4.6
Our star ratings are based on a range of criteria and are determined solely by our editorial team. See our methodology for more information.
Plans offered to small businesses
EPO, HMO
Other coverage offered
Accident, critical illness, dental, fixed indemnity, hospitalization, life, vision
Provider network
1.5 million healthcare providers and 7,000 hospitals and facilities.
On Healthcare.com's Website
EPO, HMO
Accident, critical illness, dental, fixed indemnity, hospitalization, life, vision
1.5 million healthcare providers and 7,000 hospitals and facilities.
Editor's Take
UnitedHealthcare has better-than-average complaints to state insurance departments and excellent health plan quality ratings, which we think offers small businesses excellent coverage.
Pros
- Large provider network across the country.
- Good National Committee for Quality Assurance quality ratings with excellent numbers for prevention and treatment.
- Offers a wealth of other insurance options.
More: UnitedHealthcare Health Insurance Review
Cons
- Doesn’t provide as many metal tiers or types of health plans in the ACA marketplace compared to competitors.
- Health insurance premiums are higher than some competitors.
Marketplace Health Plan Availability
- Alabama
- Arizona
- Colorado
- Florida
- Georgia
- IIllinois
- Kansas
- Louisiana
- Maryland
- Massachusetts
- Michigan
- Mississippi
- Missouri
- Nevada
- New York
- North Carolina
- Ohio
- Oklahoma
- Tennessee
- Texas
- Virginia
- Washington
How Does Small Business Health Insurance Work?
The Affordable Care Act defines a small business as a group of no more than 50 full-time employees (FTE), though some states may define it differently.
A small business owner can enroll in a group health insurance plan offered by a private insurance company and then provide their employees the opportunity to enroll in that plan. The employer generally pays part of their employees’ monthly premiums, while employees typically pay smaller premiums, as well as their deductibles, copays, coinsurance and services not covered by the plan.
Small business owners contract with health insurance companies and decide how many options to provide to employees.
Types of Health Insurance Companies for Small Businesses
Small business owners can buy health insurance for their employees through approved insurance companies with the Small Business Health Options Program (SHOP).
Employers may choose the types of benefit design, which influences whether an employee needs referrals to see specialists, can get out-of-network care and other factors. Three types of health insurance plans offered to small businesses are:
- EPO: Exclusive provider organization plans are often an affordable option. EPOs don’t usually require members to get primary care referrals to see specialists but they also often don’t cover out-of-network care.
- HMO: Health maintenance organization plans are generally much cheaper than other options, but they also have limitations not found in other plans. That includes needing primary care referrals to see specialists and not being covered for out-of-network care.
- POS: Point of service (POS) plans may allow you to get out-of-network care, but you generally need primary care referrals to see specialists and you must choose a primary care provider. These plans aren’t as common as the other types.
- PPO: Preferred provider organization plans are often the most expensive because they offer the most flexibility. That flexibility includes members not needing to get primary care referrals to see specialists and the ability to get out-of-network care.
Getting insurance through the SHOP Marketplace allows employers to offer health plans from multiple insurance companies and qualifies them for the Small Business Health Care Tax Credit, which can help with the cost of providing coverage.
Your business must meet these requirements to qualify for the SHOP tax credit:
- Fewer than 25 full-time equivalent (FTE) employees.
- Average employee salary is about $56,000 per year or less.
- Pay at least 50% of your full-time employees’ premium costs.
- Offer SHOP coverage to all full-time employees.
Small business owners can also work with a health insurance broker who conducts all plan research and comparisons to find the best plan for your business at no additional charge. Or they can buy directly from a health insurance company.
If you buy coverage through the ACA marketplace, plans are organized by “metal” tiers: bronze, silver, gold and platinum. The tiers differ by premiums and out-of-pocket costs. For instance, bronze and silver plans have low premiums but higher deductibles and coinsurance. Gold and platinum plans have high premiums but lower out-of-pocket costs.
Employers have flexibility in which type of plans they choose to offer their employees.
How Much Does Health Insurance for Small Business Cost?
The average cost for small business owners is $612 per employee per month and $1,274 for family coverage per month, according to Kaiser Family Foundation’s 2023 Employer Health Benefits Survey.
The exact cost depends on multiple factors, including previous health insurance claims. For instance, a year of high employee healthcare costs could lead to higher health insurance rates set by the insurance company the next year.
Average Health Insurance Costs for Small Business
Average annual employer contribution | Average annual employee contribution | Total average for small businesses | |
---|---|---|---|
HMO | $6,644 | $1,641 | $8,285 |
POS | $6,970 | $1,346 | $8,316 |
PPO | $7,729 | $1,390 | $9,119 |
All plans | $7,349 | $1,373 | $8,722 |
Source: Kaiser Family Foundation, 2023 Employer Health Benefits Survey.
Featured Health Insurance Partners
1
Aetna
Coverage area
Offers plans in all 50 states and Washington, D.C.
Number of providers in network
About 1.2 million
Physician copays start at
$20
2
Blue Cross Blue Shield
Coverage area:
Offers plans in all 50 states and Washington, D.C.
Number of providers in network
About 1.7 million
Physician copays start at
$10
3
Cigna
Coverage area
Offers plans in all 50 states and Washington, D.C.
Number of providers in network
About 1.5 million
Physician copays start at
$0
How to Compare Small Business Health Insurance Plans
Choosing a small business health insurance plan requires you to act similar to a consumer buying an individual health insurance plan on the Affordable Care Act (ACA) marketplace.
Here’s what to look at when comparing small business health insurance plans.
- Benefit design: See what types of health plans a company offers, including EPO, HMO, POS and PPO. The benefit design dictates whether employees can get out-of-network care and need referrals to see specialists.
- Premiums: A health insurance premium is what members pay to have coverage. This usually gets deducted from paychecks. Employers pay most of the premiums, so businesses will need to figure out how much coverage will cost them and their employees.
- Out-of-pocket costs: Health insurance deductibles, coinsurance and out-of-pocket maximums play vital roles in how much members pay when they need healthcare services. Choosing a plan with high deductibles may cost businesses and employees for premiums, but it also puts more costs on employees when they need healthcare.
- Provider network: Health insurance companies contract with providers and medical facilities like hospitals. These contracts decide how much providers get paid and may set requirements for providers, such as requiring that they meet a minimum quality of care. A small network could result in employees needing to search for a doctor and lead to extra out-of-network costs.
EXPERT TIPS
How to Choose the Right Small Business Health Insurance
Les Masterson
Insurance Editor
Amy Danise
Insurance Managing Editor
Michelle Megna
Insurance Lead Editor
Jason Metz
Insurance Lead Editor
Ashlee Valentine
Insurance Editor
Offer Multiple Plans If Possible
I believe that providing employees with multiple options can help with employee satisfaction. One employee may like the lower premiums in an HMO and not have a problem staying in-network, while another may prefer the flexibility of a PPO with the understanding that they will pay more in premiums. Giving them those options can help maintain your workforce.
Les Masterson
Insurance Editor
Get Health Insurance Quotes from Multiple Insurers
Small employers aren’t all the same so don’t follow another company’s insurer or stay with your current company without checking other insurers. Instead, I would suggest getting quotes from multiple insurance companies for the same type of coverage so you can accurately compare them side-by-side.
Amy Danise
Insurance Managing Editor
Figure Out How Much You Can Afford
Part of buying health insurance as an employer is figuring out how much you can afford to spend on health insurance and how much employees may have to pay. I would suggest thinking about how much you want employees to spend on health insurance premiums and what coverage you need.
Michelle Megna
Insurance Lead Editor
Work With an Insurance Broker
If you’re unsure about health insurance, talk to an insurance broker to help you with the process. I’ve found that HealthCare.gov offers a tool that lets you find available health insurance brokers in your area by entering your ZIP code.
Jason Metz
Insurance Lead Editor
Look Into Tax Credits
Small business owners may qualify for tax credits to help you pay for employee health insurance through a Small Business Health Options Program (SHOP) plan. I’ve seen some small businesses save as much as 50% of their premiums, but there are requirements to qualify.
Ashlee Valentine
Insurance Editor
How to Get Health Insurance for a Small Business
You have several options when it comes to searching for the right plan options for your small business.
Compare Plans
| |
Work with an Insurance BrokerInsurance brokers know the ins and outs of health insurance plans, as well as state and federal requirements. Just be sure you’re working with an independent broker who will show you all plans available to you to best meet your needs. | |
Explore the SHOP MarketplaceAt Healthcare.gov, you’ll find helpful calculation tools and clear choices for high-quality group insurance plans. |
Methodology
We analyzed 84 data points about coverage and quality for seven large health insurance companies to determine the best health insurance providers for small businesses owners. Our ratings are based on:
- Complaints made to state insurance departments (30% of score): We used complaint data from the National Association of Insurance Commissioners.
- Plan ratings from the National Committee for Quality Assurance (30% of score): The National Committee for Quality Assurance (NCQA) is an independent, nonprofit organization that accredits health plans and produces ratings based on specific metrics, including patient experience, prevention, treatment, overall rating of the health plan and rating of care.
- Average silver plan deductible (20% of score): The deductible is how much you have to pay for healthcare in a year before the health plan begins picking up a portion of the costs. Companies with health plans that had low deductibles got more points.
- Breadth of health plans (10% of score): Health insurance companies may offer up to four types of plan benefit designs (PPO, HMO, EPO and POS). Companies that offered more types of plans got more points.
- Metal tier offerings (10% of score): The ACA marketplace has four metal tier levels. We gave points to companies that offered more tier plan options.
Read more: How Forbes Advisor rates health insurance companies
Other Health Insurance Companies We Rated
Here are other health insurance companies we analyzed as part of our research.
Insurance company | Forbes Advisor rating |
---|---|
Oscar |
|
Cigna |
|
Aetna |
|
Find The Best Health Insurance Companies Of 2024
Learn More
Small Business Health Insurance Frequently Asked Questions (FAQs)
Do small businesses have to provide health insurance?
Small business owners aren’t legally required to provide health insurance to their workers, but there are rules for those who do.
With that said, make sure you understand how your state defines a small business, as it will impact what you are required to provide, should you decide to offer health insurance to your employees.
What is a self-insured health plan?
An employer collects health insurance premiums in a self-insured health insurance plan and the business pays the claims rather than a health insurance company. Self-insured plans are more often an option for larger companies.
One potential benefit of self-insured plans is that businesses can save money if they collect more premiums than claims paid out. On the other hand, it could cause a problem if claims exceed premiums.
A self-insured health plan generally still requires that employers contract with a third party to enroll members, process claims and set up provider networks.
How much does group health insurance cost for small businesses?
The average annual cost of health insurance for small businesses is $8,722 annually per employee. Of that amount, employers pick up $7,349 on average and employees pay the rest, according to Kaiser Family Foundation’s 2023 Employer Health Benefits Survey.
Small businesses pay less for health maintenance organization (HMO) plans than other plans. Small companies spend $6,644 annually on average for HMO coverage per employee compared to $6,970 for a point of service (POS) plan and $7,729 for a preferred provider organization (PPO) plan, according to Kaiser Family Foundation.
The Kaiser Family Foundation added that small companies are more likely to pay all employee premiums than larger companies. The report said 30% of covered workers in small firms don’t pay premiums for single coverage for health insurance. That’s compared to just 6% in large companies.
How many employees does a small business have to have to provide health insurance?
Small businesses don’t have to offer health insurance, but employers with more than 50 full-time employees working at least 30 hours per week must offer coverage or face tax penalties.
Small businesses that provide coverage may benefit from tax credits.
Can business owners buy a plan on the marketplace?
Small businesses can buy health coverage for employees on the health insurance marketplace through the Small Health Options Program (SHOP). SHOP lets employers compare plans and the Small Business Health Care Tax Credit can help save money for businesses.
Next Up In Health Insurance
- Best Health Insurance
- Best Affordable Health Insurance
- Best Short-Term Health Insurance
- Best Dental Insurance
- How Much Does Health Insurance Cost?
- UnitedHealthcare Health Insurance Review
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