• HR + Payroll Software

Talent Acquisition

  • Talent Management

Workforce Management

  • Benefits Administration

Payroll Software

Hr software, expense management software, recruiting software, automated talent sourcing, onboarding software, talent development, career management software, paycor paths, learning management system, pulse surveys, compensation planning, time + attendance software, scheduling software, benefits advisor, aca reporting software, workers’ compensation, compliance overview, payroll / business tax credits, workforce benefits, regulatory compliance, data & security.

health insurance laws for small business

Transform Frontline Managers Into Effective Leaders

health insurance laws for small business

Simplify Compliance Management With Paycor

  • By Industry

Professional Services

Manufacturing, restaurants, 1-49 employees, 50-1000 employees, 1000+ employees, transform frontline managers into effective leaders.

  • Product Technology Partners
  • Retirement Services
  • Franchisor Opportunities
  • Private Equity

Guides + White Papers

  • Case Studies
  • HR Glossary

health insurance laws for small business

Perspectives+

  • News + Press
  • Sponsorships
  • AI Guiding Principles
  • Plans + Pricing
  • Take a guided Tour
  • Watch a Demo
  • Solution Finder

Call Us Today:

health insurance laws for small business

Exclusive Access to Select Products

  • HR + Payroll Software Payroll Software HR Software Analytics Expense Management Software
  • Talent Acquisition Recruiting Software Automated Talent Sourcing Onboarding Software
  • Talent Management Talent Development Career Management Software Paycor Paths Learning Management System Pulse Surveys Compensation Planning
  • Workforce Management Time + Attendance Software Scheduling Software
  • Benefits Administration Benefits Advisor ACA Reporting Software Workers’ Compensation
  • By Industry Healthcare Professional Services Manufacturing Nonprofits Restaurants Education Retail Technology
  • By Role Finance HR Payroll
  • By Size 1-49 Employees 50-1000 Employees 1000+ Employees
  • Call Us Today: 855-752-8564

2024 Small Business Health Insurance Requirements

Last Updated: January 9, 2024 | Read Time: 6 min

One Minute Takeaway

  • Providing health insurance can boost engagement and morale to employees.
  • Employer-sponsored health coverage must now not exceed 8.39% of an employee’s income if it is to satisfy ACA affordability requirements for 2024.
  • Employers should be aware of state laws in addition to federal laws related to requirements.

Small business owners wear a lot of hats. They may have to be marketers, hiring managers, and even insurance experts, in charge of evaluating benefits packages for their employees. The problem is, a lot of business leaders are in the dark about the myriad compliance requirements surrounding health insurance coverage. If your company plans to provide health insurance for employees, you need to understand your options, and their legal implications.

5 Important Requirements to Know

  • Small businesses with fewer than 50 full-time employees don’t have to provide health insurance under the ACA (Affordable Care Act).
  • Companies with more than 50 full-time employees (or full-time equivalent employees) in the previously reported calendar year may be subject to the employer shared responsibility provisions of the ACA. This means that the employer must provide essential coverage to their employees (and families) or make a comparable payment to the IRS.
  • Employers are required to provide employees with a summary of benefits and coverage explaining health plan coverage and costs.
  • Coverage costs of an employer-sponsored group health insurance plan must be reported by employers on their employee’s W-2.
  • Small businesses offering health insurance must offer it to all eligible employees when they become eligible for coverage, and that eligibility period should not extend beyond 90 days.

5 Health Insurance Options to Consider in 202 4

Some small businesses ­– like those with fewer than 50 employees – don’t directly offer employees a health care coverage plan. These companies can still assist employees with their health care needs. Many business leaders go with one of these options.

  • QSEHRA –  A  Qualified Small Employer Health Reimbursement Arrangement  or QSEHRA (pronounced Q-Sara) is one extremely helpful benefits option for small businesses. In this arrangement, small business owners put aside a set amount of non-taxed money every month to cover employees’ health care expenses. Employees are responsible for paying their own medical bills or insurance premiums, but the employer then reimburses the submitted expenses with those saved pre-tax dollars.
  • ICHRA –  With an ICHRA or Individual Coverage Health Reimbursement Arrangement, employers provide a monthly tax-free allowance to their employees for individual health coverage expenses. This enables employees to shop for insurance outside of an employer’s group health plan or when an employer does not offer health insurance at all.
  • Traditional Group Health Insurance –  This is the standard group health coverage that everyone’s familiar with. Businesses can either work with an insurance company directly or use an insurance broker to purchase group health plan coverage for all of their employees.
  • Group Coverage HRA – Often known as a GCHRA,  this is an employer-funded medical expense reimbursement plan. It allows a business to reimburse its employees tax-free for eligible out-of-pocket expenses and health insurance premiums. It’s most often paired with a high-deductible health plan (HDHP).
  • Association Health Plan  – AHPs show that there is strength in numbers. Several small businesses (those that are either in geographic proximity or in the same industry) can band together and gain the purchasing power needed to buy large group coverage.

Null

Rule Changes for Larger Businesses in 2024

If your business employs 50 or more employees, you need to be aware of recent changes to health plan cost-sharing limits. Employer-sponsored health coverage must not exceed 8.39% of an employee’s income if it is to satisfy ACA affordability requirements for 2024. This is down from 9.12% in 2023. Make sure this change doesn’t push your plan into “unaffordable” territory.

State Health Insurance Laws

If your business offers insurance, you need to be aware of both state and federal laws around health programs. Regulations vary from one U.S. state to another. This can get especially complex if your business operates in more than one state, or if you employ remote workers.

Pro Tip:  familiarize yourself with your state’s Department of Insurance to stay compliant.

Paycor Can Help

If your company decides it’s ready to provide health insurance for your employees, we can make the task much easier. Paycor’s Benefits Administration Software is an efficient way to get all your people on board so you can get back to focusing on your HR strategy.

Discover How Paycor Can Help Make A Difference - Take a Tour

Related Resources

Read Time: 13 min

Can Employers Make Direct Deposit Mandatory?

Most employers offer direct deposit, but does it mandatory? Find out the direct deposit laws in your state here.

Read Time: 14 min

Unleashing the Power of Upskilling: Why Your Business Can’t Afford to Ignore It

Upskilling employees is essential for the growth of any organization. Learn how investing in your workforce can drive success in your organization.

Read Time: 10 min

The Importance of Labor Forecasting

Accurately anticipating staffing needs is crucial in today's highly competitive marketplace. Discover the power of labor forecasting, the key to optimizing your workforce.

Link to the First Citizens homepage

  • Adjustable-Rate Mortgages
  • Fixed-Rate Mortgages
  • Home Construction Loans
  • Jumbo Loans
  • Medical Professional Mortgages
  • Mortgage Refinancing
  • Renovation Loans
  • VA, FHA and USDA Loans
  • Traditional IRA
  • Calculators
  • Free Checking
  • Premier Checking
  • Prestige Checking
  • Education Savings Accounts
  • Self-Directed Investing
  • Online Savings
  • Money Market
  • Certificates of Deposit
  • Money Saver Mortgages
  • Home Equity
  • Home Improvement Loans
  • Specialized Lending
  • Vehicle Insurance
  • Property Insurance
  • Life Insurance
  • Pet Insurance
  • Umbrella Insurance Policy
  • Accident Insurance
  • Travel Rewards
  • Cash Rewards
  • Smart Option
  • Secured Cash Back

Help us help teens with cancer

Being a teen is hard enough. Help us support Teen Cancer America to improve their quality of care.

  • Auto Insurance
  • Business Bonds
  • Buy-Sell Agreement
  • Business Interruption
  • Liability Insurance
  • Life and Disability Insurance
  • Management Liability
  • Succession Planning
  • Umbrella Insurance
  • Workers' Compensation
  • Business Insurance Center
  • Commercial Letters of Credit
  • Foreign Currency Exchange Services
  • International Paying & Receiving
  • Documentary Collections
  • International Wire Transfers
  • Standby Letters of Credit
  • Cash Management
  • Skilled Trades
  • Starting a Business
  • Bank at Work Program
  • Receivables
  • Liquidity Management
  • Reconciliation and Reporting
  • Fraud Prevention
  • ACH Services
  • Merchant Services
  • Agribusiness
  • Manufacturing & Distribution
  • Professional Services
  • Property Management
  • Disability Insurance
  • 401(k) Retirement Plans
  • Credit Cards
  • Business Loans & Financing
  • Business Equipment Finance
  • SBA Term Loans
  • Asset-Based Lending
  • Capital Markets
  • Commercial Bank Accounts
  • Commercial Real Estate
  • Community Association Banking
  • Credit & Financing
  • International Banking
  • Middle Market Banking
  • Risk Management & Insurance
  • Sponsor Finance
  • Treasury Management Services
  • Aerospace, Defense & Government
  • Cannabis & Hemp Banking
  • Entertainment & Media
  • Railcar Leasing & Financing
  • Tech & Telecom
  • Trade Associations
  • Transportation & Logistics
  • Community Association Banking & HOA
  • Industry Expertise
  • International Business Banking
  • Risk Management
  • Treasury Management
  • Expanding Wealth
  • Preserving Wealth
  • Transitioning Wealth
  • Institutional Trust Services
  • Advice & Planning
  • Planning Tools
  • MoneyGuidePro
  • Business Owner Interest
  • Estate Planning
  • Philanthropic and Charitable
  • Preservation
  • Transfer Planning
  • Meet Brent and Phil
  • Submit a Question
  • Video Archive
  • Commentary Archive

Small Business Health Insurance Requirements: Understanding New Laws

Small business health insurance requirements and the legislation around them can feel intimidating at first, especially as new laws and regulations are put in place. In response to the COVID-19 pandemic, the American Rescue Plan Act, or ARPA, was signed into law in March 2021. This sweeping piece of legislation aims to provide relief and support for individuals, businesses and local government. As a small business owner, you're impacted as well.

health insurance laws for small business

Most notably, it's important to pay attention to how small business requirements may change due to the Affordable Care Act, or ACA . Signed into law in 2010, the ACA was designed to expand healthcare coverage to more Americans—and ARPA broadens some of these provisions. Here are the changes you need to know.

Lower marketplace premiums

The ACA marketplace serves as a central location for consumers who don't have access to employer-sponsored health insurance. In a typical year, people can enroll from November to January.

One of the most significant changes ARPA has made to the ACA is a decrease in the price of health insurance in the marketplace. It was essentially designed to make plans more affordable across the board and offer more accessible coverage to those who couldn't previously pay for it.

Temporary increase of eligibility for subsidies

Primarily, marketplace premiums are more affordable because of a temporary expansion of subsidies. In this case, subsidies are funds provided by the government as a form of financial assistance on monthly insurance premiums to help make coverage more accessible. A recent study on ARPA found that 92% of those who buy insurance through the marketplace should now qualify for subsidies.

There previously was an income-cap restriction on who could qualify for subsidies. This cap has been removed through 2023. During this time, those who make above 400% of the federal poverty level—which is slightly more than $51,000 per year for an individual—and were previously ineligible will now be eligible for subsidies. Those who make between 100% and 400% of the federal poverty level will also see subsidy boosts.

Finally, the maximum amount anyone will pay for their insurance in the marketplace was lowered to 8.5% of their income.

ACA small business tax credits and reimbursements

The ACA has never mandated small businesses with fewer than 50 employees to provide health insurance coverage. However, if you decide to offer employer-sponsored insurance, you may qualify for tax credits. These credits could cover up to 50% of your employees' premiums.

You may qualify if:

  • You have fewer than 25 full-time ( or full-time equivalent ) employees. Seasonal employees are not covered, even if they work full time during the season.
  • Employees' average salary is approximately $50,000 or less per year.
  • You pay at least 50% of your full-time employees' premiums.

If you meet these qualifications, you may want to explore the Small Business Health Options Program , or SHOP, to learn more about the tax credits that could be available.

Staying up to date

It's always important to keep an eye out for any new small business health insurance requirements so you can more easily determine how they'll impact you and your employees. Staying ahead of the curve can help ensure your business continues to run smoothly, and you'll have what you need to build the health plan that works best for everyone.

Financial insights for your business

No results found

This information is provided for educational purposes only and should not be relied on or interpreted as accounting, financial planning, investment, legal or tax advice. First Citizens Bank (or its affiliates) neither endorses nor guarantees this information, and encourages you to consult a professional for advice applicable to your specific situation.

Third parties mentioned are not affiliated with First-Citizens Bank & Trust Company.

Links to third-party websites may have a privacy policy different from First Citizens Bank and may provide less security than this website. First Citizens Bank and its affiliates are not responsible for the products, services and content on any third-party website.

First Citizens Bank is a Member FDIC and an Equal Housing Lender icon: sys-ehl .

NMLSR ID 503941

Please select the option that best matches your needs.

Account Questions

Send a secure message from Digital Banking

Other Questions

General customer service assistance

Customers with account-related questions who aren't enrolled in Digital Banking or who would prefer to talk with someone can call us directly .

Welcome Back

Other services.

First Citizens Rewards®

Online Brokerage

Portfolio Online

Retirement Plan Access

Financial Planning Tool

Stellar Technology - Fund

Lockbox - Online Treasury Solutions

Pay HOA Fees

Commercial Online Banking

Remote Deposit Capture

Automated Payables

CA Integrated Payments

eReceivables Payment

Lockbox Portal

ChecXchange

Equipment Finance

My Insurance Center

Worldpay IQ

American Express Supplies

Purchasing Card

Electronic Bill Presentment & Payment

Profile Manager

U.S. flag

An official website of the United States government

Here’s how you know

Official websites use .gov A .gov website belongs to an official government organization in the United States.

Secure .gov websites use HTTPS A lock ( Lock A locked padlock ) or https:// means you’ve safely connected to the .gov website. Share sensitive information only on official, secure websites.

As a small business owner, am I required to offer health insurance to my employees?

If your business qualifies as small (fewer than 50 full-time employees and full-time equivalents FTEs), you are not required to offer coverage.

If you’re  self-employed , you can sign up for coverage for yourself (and family members) through the Health Insurance Marketplace®.

Small business owners who want to offer health insurance coverage have options such as:

  • Small Business Health Options Program (SHOP)
  • Health reimbursement arrangements (HRAs)
  • Health Savings Accounts and health plans with tax-saving benefits

Learn more about SHOP and other ways to offer health insurance to your employees

Have questions about SHOP coverage for businesses with 50 or fewer employees?  Contact the SHOP Call Center at 1-800-706-7893 (TTY users can call 1-888-201-6445).

Hours: Monday through Friday, 9 a.m. to 5 p.m. EST.

Note: Businesses with over 50 employees may have to make what’s called a Shared Responsibility Payment . This payment may be required if they do not offer coverage that meets certain standards.

Search HHS FAQs by questions or keywords:

  • 100% Safe and Secure
  • Verified Local Help - Healthcare.gov

Marketplace America.org Health Insurance

Marketplace Health Insurance for the Self Employed and Small Business Owners

Navigating health coverage as a self-employed or small business owner? Discover Marketplace plans, tax benefits, and smart options in this guide.

Self-Employed & Small Business Health Insurance

One of the major expenses for not just families and individuals, but also employers and the self-employed is having access to health care. Being self-employed or owning a business can make it seem like there are limited health plan options for medical services. The federal government provides resources to help employers of a small business and the self-employed to pay for most plans.

Ways to get medical coverage as a self-employed individual or small business owner

Individual health insurance policy.

The first way to get medical coverage as a self-employed individual or owner of a small business is to buy an individual health insurance policy. These plans are regulated by state governments, so the benefits and coverage can vary state to state. Most importantly, these plans do not have to be bought through an employer, so they may be more expensive. However, the federal government offers tax breaks for self-employed individuals and small business owners who purchase their own health coverage.

Trade association

The second way to get medical insurance as a self-employed individual or small business owner is to join a trade association. Some of these organizations offer group health insurance plans to their members. The benefits and coverage can vary depending on the organization, but this may be a more affordable option than purchasing an individual health insurance policy.

Medicaid and CHIP

The third way to get medical insurance as a self-employed individual or small business owner is to participate in a government program like Medicaid, Medicare or the Children’s Health Insurance Program (CHIP). These programs are designed to help low-income families and individuals afford health care. To be eligible for Medicaid, a person must have an income that is below a certain level. For CHIP, a family’s income must be low, but not as low as it would have to be to qualify for Medicaid, Medicare is only available to people over 65 or disabled.

Marketplace Insurance

The fourth way to get health coverage as a self-employed individual or small business owner is to purchase a medical insurance policy through the Health Insurance Marketplace. The Marketplace is a place where people can shop for and compare different medical insurance plans. There are four different types of plans that are offered through the Marketplace: Bronze, Silver, Gold, and Platinum. The plans differ in how much they cover and how much you will have to pay out-of-pocket for medical services.

Healthcare sharing ministry

The fifth way to get medical insurance as a self-employed individual or small business owner is to join a health care sharing ministry. These organizations are not insurance companies, but they do provide some financial assistance with medical expenses. To be eligible, members must agree to share their medical expenses with other members of the organization.

Short-term health insurance policy

The sixth way to get medical insurance as a self-employed individual or small business owner is to purchase a short-term health insurance policy. These policies are not required to provide the same level of coverage as other types of medical insurance plans, but they can be useful for people who need temporary coverage. For example, if you are between jobs or waiting for your Marketplace health insurance to start, a short-term health insurance policy can help you pay for medical expenses.

No matter which way you choose to get a health plan as a self-employed individual or small business owner, it’s important to make sure that you have coverage that meets your needs. You can use the resources on Healthcare.gov to find out more about your options and to compare different medical insurance plans. You can also contact your state’s Department of Insurance for more information.

Tax Implications

Individuals who are self-employed can deduct the cost of their health insurance premiums on their taxes. The IRS notes that this deduction is available whether you purchase a medical insurance policy through the Health Insurance Marketplace, a private company, or a government program like Medicaid or Medicare.

To deduct the cost of your health insurance premiums, you will need to fill out Form 1040 and include Schedule C. On Schedule C, you will list the amount you paid for health insurance premiums under the “Insurance and Other Expenses” section. The amount you can deduct is limited to the amount of profit you made from your business. So, if your business had a net loss for the year, you would not be able to deduct the cost of your health insurance premiums.

Self-employed individuals and small business owners have several options for obtaining health insurance. They can purchase a policy through the Health Insurance Marketplace, participate in a government program like Medicaid or Medicare, join a health care sharing ministry, or purchase a short-term health insurance policy. Tax deductions are available for the cost of health insurance premiums.

Here are a few things to keep in mind when shopping for medical insurance:

1. Make sure the plan covers the essential health benefits and preventive care required by the Affordable Care Act. These include hospitalization, prescription drugs, maternity and newborn care, mental health and substance abuse services, and more.

2. Consider your family’s health needs when choosing a plan. If you have young children, for example, you may want to find a plan that offers good coverage for pediatric care.

3. Compare premiums, deductibles, and other costs. Be sure to factor in your budget when choosing a plan.

4. Check whether the plan has a network of doctors and hospitals you can use.

5. Read the plan’s fine print to understand what is and isn’t covered.

With so many different medical insurance plans available, it can be difficult to know where to start. The best place to start is by using the federal government’s Health Insurance Marketplace.

How small businesses and the self-employed get health coverage through the federal government health insurance marketplace

The Health Insurance Marketplace is a website where you can shop for medical insurance. It’s open to everyone, regardless of whether you get your medical insurance through your job, Medicare, Medicaid, or another source.

If you’re self-employed or own a small business with fewer than 50 employees, you may be able to get a health plan through the Small Business Health Options Program (SHOP).

SHOP plans are available through the Health Insurance Marketplace. You can use the Marketplace to compare plans and prices, and apply for subsidies you may qualify for to secure a more affordable service.

You can also get help from a navigator or broker. These are people who can guide you through the process of choosing and enrolling in a medical insurance plan.

The open enrollment period for the Health Insurance Marketplace is from November 1 to December 15 each year. If you enroll during this time, your coverage will start on January 1 of the following year.

You can also enroll in a medical insurance plan outside of the open enrollment period if you have a qualifying life event, such as losing your job or getting married.

Types of health Insurance plans for small businesses and the self-employed

There are a few types of plans available through the Health Insurance Marketplace:

1. Marketplace plan: These are medical insurance plans offered by private companies that have been approved by the government.

2. Medicaid and Children’s Health Insurance Program (CHIP) plans: These are government-sponsored medical insurance programs for low-income people.

You can compare plans and prices on the Health Insurance Marketplace website. You can also find out if you qualify for subsidies to help lower your costs.

SHOP plans are available through the Health Insurance Marketplace. You can use the Marketplace to compare plans & prices and apply for subsidies to help lower your costs.

Federal government websites

To search for other information you can visit the official Federal Government website of the united states government for health and human services:

https://www.hhs.gov/programs/health-insurance/index.html

https://www.healthcare.gov/self-employed/coverage/

Need health insurance?

Call our Marketplace Call Center for free assistance* from licensed health agents.

Get a free health insurance quote today!

Find the best health insurance coverage in your state..

Get up-to-date plans and prices for individual & family health insurance.

Connecticut

Massachusetts

Mississippi

New Hampshire

North Carolina

North Dakota

Pennsylvania

Rhode Island

South Carolina

South Dakota

West Virginia

*Agents may be compensated based on enrollment in your health plan by the insurance company.

  • Individual & Family
  • Small Business
  • Contact & Support
  • Privacy Policy
  • 1-864-507-5373

Phone hours:

Monday – Thursday

9AM – 5PM EST

9AM – 3PM EST

This website is operated by Palmetto Health Pro, dba Marketplace America, under agent Tina Knight NPN: 17109406 and is not the Health Insurance Marketplace website. Click here for a listing of licensed states and state license numbers. In offering this website, Marketplace America is required to comply with all applicable federal laws, including the standards established under 45 CFR 155.220(c) and (d) standards established under 45 C.F.R. 155.260 to protect the privacy and security of personally identifiable information and state insurance laws applicable to ACA plans. This website may not display all data on Qualified Health Plans being offered in your state through your state or the federal Health Insurance Marketplace website. To see all available data on Qualified Health Plan options in your state, go to your state Health Insurance website or the federal the Health Insurance Marketplace website at HealthCare.gov . The rates displayed on this website are cost estimates and though we attempt to be as close to your final cost share as possible, it cannot be determined until you verify your eligibility by completing the application process via the federal or state marketplace. For quality control purposes, your activity on this website may be monitored or recorded by Marketplace America or its service providers.

Copyright ©2023 Marketplace America. All Rights Reserved.  Contact Us –  Privacy Policy – Sitemap

An official website of the United States Government

  • Kreyòl ayisyen
  • Search Toggle search Search Include Historical Content - Any - No Include Historical Content - Any - No Search
  • Menu Toggle menu
  • INFORMATION FOR…
  • Individuals
  • Business & Self Employed
  • Charities and Nonprofits
  • International Taxpayers
  • Federal State and Local Governments
  • Indian Tribal Governments
  • Tax Exempt Bonds
  • FILING FOR INDIVIDUALS
  • How to File
  • When to File
  • Where to File
  • Update Your Information
  • Get Your Tax Record
  • Apply for an Employer ID Number (EIN)
  • Check Your Amended Return Status
  • Get an Identity Protection PIN (IP PIN)
  • File Your Taxes for Free
  • Bank Account (Direct Pay)
  • Debit or Credit Card
  • Payment Plan (Installment Agreement)
  • Electronic Federal Tax Payment System (EFTPS)
  • Your Online Account
  • Tax Withholding Estimator
  • Estimated Taxes
  • Where's My Refund
  • What to Expect
  • Direct Deposit
  • Reduced Refunds
  • Amend Return

Credits & Deductions

  • INFORMATION FOR...
  • Businesses & Self-Employed
  • Earned Income Credit (EITC)
  • Child Tax Credit
  • Clean Energy and Vehicle Credits
  • Standard Deduction
  • Retirement Plans

Forms & Instructions

  • POPULAR FORMS & INSTRUCTIONS
  • Form 1040 Instructions
  • Form 4506-T
  • POPULAR FOR TAX PROS
  • Form 1040-X
  • Circular 230

Affordable Care Act Tax Provisions for Small Employers

More in affordable care act.

  • Individuals and Families
  • ALE Info Center
  • Health Care Tax Tips
  • Questions and Answers
  • List of Tax Provisions
  • Legal Guidance and Other Resources

Some of the provisions of the Affordable Care Act, or health care law, apply only to small employers, generally those with fewer than 50 full-time employees, including full-time equivalent employees.

If you have fewer than 50 employees, but are a member of a group with a certain level of common or related ownership with 50 or more full-time employees, including full-time equivalent employees, you are subject to the rules for large employers .

Here are the responsibilities and benefits for small employers under the health care law:

You can purchase insurance through the Small Business Health Options Program (SHOP) .  Learn more at HealthCare.gov .

  • You must withhold and report an additional 0.9 percent on employee wages or compensation that exceeds $200,000.
  • You may be required to report the value of the health insurance coverage you provided to each employee on his or her Form W-2.
  • If you provide self-insured health coverage to your employees, you must file an annual return reporting certain information for each employee you cover. 

Payments & Credits

  • You may be eligible for the Small Business Health Care Tax Credit if you cover at least 50 percent of your full-time employee's premium costs and you have fewer than 25 full-time equivalent employees.  See the  Small Business Health Care Tax Credit Estimator .
  • If you self-insure, you may be required to pay a fee to help fund the Patient-centered Outcomes Research Trust Fund .

Employer Topics

  • HealthCare.gov
  • Small Business Health Care Tax Credit and the SHOP Marketplace
  • Employer Shared Responsibility Provisions
  • Information Reporting by Applicable Large Employers
  • Information Reporting by Providers of Minimum Essential Coverage
  • Affordable Care Act Information Returns (AIR)
  • ACA Information Center for Tax Professionals

Related Links

  •  Facebook
  •  Twitter
  •  Linkedin
  • Skip to main content
  • SHOP Marketplace

Get health insurance for your small business

Health insurance is a critical factor for small businesses to help retain and recruit employees and sustain productivity and satisfaction. UnitedHealthcare offers a range of group health insurance options designed to help your small business save money and support your employees’ health and well-being.

Request a quote for your small business (2-50 employees)

Simply complete a quick form to get started with a quote for your small business. A UnitedHealthcare representative will get in touch and work with you to help find group health insurance options that best fit your business.

health insurance laws for small business

View plans or request a quote (2-50 employees)

To get more details on health insurance options for your small business, click on your state below. In markets where the Small Business Store is available, 1 you will be directed there. In markets where the Small Business Store is not available, you can request a quote from UnitedHealthcare.

  • Connecticut
  • District of Columbia
  • Florida (North)
  • Florida (South)
  • Massachusetts
  • Mississippi
  • New Hampshire
  • New York (upstate)
  • North Carolina
  • North Dakota
  • Pennsylvania
  • Rhode Island
  • South Carolina
  • South Dakota
  • U.S. Virgin Islands
  • West Virginia
  • Back to top

For companies with 51 or more employees

Find the right medical plans for your employees and your business, plus supplemental plans for dental, vision, disability and more.

Explore products and solutions for small businesses

There's not just one way we work to help small businesses like yours. By offering benefits packages designed to improve employee experience and help employers manage cost, there's a number of products and solutions that may be right for your business.

Explore a range of group health plans and network options.

Discover how integrated pharmacy benefits from OptumRx may help lower costs for you and your employees.

Enhance your employees’ specialty benefits package with vision, dental, financial protection plans and more.

See how we are guiding employees to the behavioral care they need.

Get more health plan resources

Find information to help you and your employees get the most from their health benefits.

Did you know?

UnitedHealthcare’s employer-sponsored insurance plans serve groups that fall into three categories: Small Group plans refer to employers with up to 100 employees; Key Accounts is for employers with 101 to 5,000 employees; and National Accounts serves employers with more than 5,000 employees.

Building healthier workplaces together

A small business with about 40 employees shares why working with UnitedHealthcare has enabled them to provide a health plan that delivers on what matters to their employees.

health insurance laws for small business

Video transcript

Instrumental music plays throughout. Three white lines curl across a blue background. Blue text centers a white screen.

ONSCREEN TEXT:          Building healthier workplaces together

Upbeat music plays to a montage of shots from employees working in warehouse, a forklift, a man outside, seed being filled into a bag, a white truck driving through plains, and a blonde-haired woman smiling.

The screen dissolves into white with the blue United U logo appearing in the center.

Inspirational music begins playing as we see an aerial view of the Albert Lea Seed Plant. The scene switches to an aerial view of a baseball field, then to the Albert Lea Seed Plant entrance. The view moves inside where Matt Helgeson speaks to a circle of employees in the warehouse.

MATT: Okay, good morning, everybody.

We've got trucks at the dock today, so it's going to be a busy Monday.

We've got trucks on the scale as well, so we'll need a couple samples pulled up.

The screen shows Matt being interviewed before a white background.

MATT: Albert Lea Seed has been in business for almost 100 years,

A blue bar slides into the bottom left of the screen, containing white text.

ONSCREEN TEXT:          Matt Helgeson Owner, Albert Lea Seed

MATT: and today our focus is distributing seed throughout the Upper Midwest and throughout the country.

A white text box with the Albert Lea Seed logo scrolls down from the top left of the screen.

ONSCREEN TEXT:          Organization Albert Lea Seed 

Location Albert Lea, MN

Industry Agriculture

Established 1923

Number of employees 40

Music continues. We see Matt checking seed and then a man pouring seed into a bag in a warehouse.

Matt: One of our key focuses is distributing an organic and non-GMO seed to farmers who are under those production methods.

We see Matt and another man examining seeds in a field.

MATT: Many of our seeds that we offer here are produced by local farmers.

Those seeds include soybeans especially, and also small grains; things like oats, wheat, barley, and rye.

We see palettes of bags of organic grain seed and barley. Scene cuts to a white truck driving on a dirt road in the fields.

MATT: Those relationships with our customers matter to us, and they matter to the farmer, and so we try to offer honest advice and seeds in which the quality we believe is truly there.

Matt gets out of truck and shakes hands with another man in a field. Matt and a man inspecting crop.

Nicole Hansen begins speaking. We see the Albert Lea Seed building sign, then Nicole speaking to employees in the warehouse, handing out open enrollment booklets. A white UnitedHealthcare U logo is at the bottom right corner of the screen

NICOLE: Good morning, everyone. I'm going to briefly talk to you guys this morning about open enrollment for 2022. I'm going to hand out some booklets for everyone.

The screen changes to Nicole Hansen interviewing before a white background. A blue bar slides into the bottom left of the screen, containing white text.

ONSCREEN TEXT:        Nicole Hansen Human Resources, Albert Lea Seed

NICOLE: A lot of people are surprised to hear that the Albert Lea Seed House even offers benefits just because we're such a small employer and we're not actually required to offer any type of health insurance.

Nicole continues speaking while we see a montage of a forklift in the warehouse.

NICOLE: We want the best for our staff and for their families. We take a lot of pride in not having high turnover rates, and that's because of how we treat our employees and how comfortable they feel with us.

The screen switches back to Nicole in front of a white background.

NICOLE: We meet with our broker every year, the controller and I do, and we're always looking at a plan that's going to impact our staff in the most positive way.

Nicole continues speaking while we see a montage of employees working with seed in the warehouse.

NICOLE: Which one is going to cover them is depending on what's going on in their life and make a positive impact on them and their families.

Matt begins speaking and we see a montage of workers in the warehouse.

Matt: The health of our employees is critically important.

The screen changes to Matt being interviewed in front of a white background.

MATT: The UnitedHealthcare plan has been very beneficial for all of our employees here.

While Matt is speaking, we now see a montage of employees at work and the white UnitedHealthcare U logo in the bottom right corner.

MATT: The incentives for employees to improve their health and have more of a preventative concept is really important.

Nicole is speaking before a white background.

NICOLE: The incentive program that's offered through UnitedHealthcare is a huge success with all of my staff here.

While she is speaking, we see Nicole and Matt walking and talking outside.

NICOLE: They love the incentive for them to get up and get moving. It gives them a great feeling, and they love the extra cash flow into their HSA. These plans that we offer through UnitedHealthcare are very important to us because happier employees are more productive employees, which are healthier employees.

The screen is changing back to Nicole speaking in front of a white background

NICOLE: And that's exactly what we strive for here at the Albert Lea Seed House.

Blue text flashes quickly on screen, centering a white background.

ONSCREEN TEXT:        There

ONSCREEN TEXT:        for

ONSCREEN TEXT:        what

ONSCREEN TEXT:        matters

A blue u-shaped logo appears against a white background, followed by text.

ONSCREEN TEXT:        UnitedHealthcare

Small black text runs along the bottom of the screen.

ONSCREEN TEXT:        All trademarks are property of their respective owners.

ONSCREEN TEXT:        Insurance coverage provided by or through UnitedHealthcare Insurance Company or its affiliates. Administrative services provided by United HealthCare Services, Inc. or their affiliates.

ONSCREEN TEXT:        © 2023 United HealthCare Services, Inc. All Rights Reserved. 23-2747306

ONSCREEN TEXT:        EI232767439 11/23

  • Search Search Please fill out this field.
  • Business Insurance
  • Small Business Insurance

Best Health Insurance Companies for Small Businesses for 2024

Blue Cross Blue Shield is our top pick for its availability and wellness programs

health insurance laws for small business

We independently evaluate all recommended products and services. If you click on links we provide, we may receive compensation. Learn more .

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. 

  • 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
  • Our Top Picks

Blue Cross Blue Shield

Kaiser Permanente

UnitedHealthcare

  • See More (1)

The Bottom Line

Small business insurance options.

  • Frequently Asked Questions (FAQs)
  • Methodology

Best Overall : Blue Cross Blue Shield

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.

Nationwide availability

Health and wellness discounts

Workplace wellness programs in many states

Poor J.D. Power ranking in some regions

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. 

BCBS companies also have an A or A- financial strength rating from AM Best . 

Best for Customer Satisfaction : Kaiser Permanente

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.

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

Only available in eight states and D.C.

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. 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. 

The main drawback is that Kaiser Permanente isn’t available everywhere. The company only offers plans in eight states and the District of Columbia. Kaiser does offer a SHOP (Small Business Health Options Program) plan in Georgia and Virginia.

Best for Part-Time and Seasonal Workers : UnitedHealthcare

UnitedHealthcare offers small business plans nationwide, including a unique coverage solution for contractors, part-time workers, and seasonal employees.

Offers a unique program for non-benefit-eligible workers

Offers wellness resources and incentives

A+ financial strength rating from AM Best

J.D. Power ratings vary by region

UnitedHealthcare is our top pick for small businesses with several types of employees and contractors, including part-time and seasonal workers. Its FlexWork program offers coverage for non-benefit-eligible employees nationwide. The program provides group-premium-equivalent rates for three plan types designed for different types of workers, and you can add extra benefits like $0 telehealth, dental, and vision. 

UnitedHealthcare also offers members access to Self Care (a wellness app), fitness incentives, an online weight loss program, a smoking cessation program, and more. Plus, UnitedHealthcare offers a large provider network of more than 1.3 million healthcare providers. 

UnitedHealthcare also boasts an A+ financial strength rating from AM Best and a 3.5-star average NCQA rating. Though J.D. Power ratings vary by region, UnitedHealthcare was the top-scoring company in Texas and Virginia. The company also offers SHOP plans in Maryland, Massachusetts, New York, and D.C.

Best for Self-Funded Plans : Aetna

Aetna is one of the few health insurance companies to offer self-insured plans tailored to small businesses. We also like that it offers virtual primary care and a CVS allowance.

Offers self-funded plans for up to 25% upfront savings

Offers a variety of health expense funds

Optional robust behavioral health benefits

Members of some plans can access affordable care at MinuteClinic locations

Fully insured group plans in some states don’t include MinuteClinic benefits

Self-funded plans from Aetna offer up to 25% savings upfront, plus stop-loss insurance if your claims for a particular month go over your maximum claims amount. When you renew your plan, Aetna will refund 50% of any surplus funding to you. 

Members get access to CVS Health virtual primary care plus up to a $100 allowance for health and wellness products at CVS. The company also offers HRAs, HSAs, FSAs, and retirement reimbursement arrangements (RRAs) in most states. In addition, you have the option of adding behavioral health benefits that include virtual counseling, mental health tools, and an employee assistance program. Many plans offer MinuteClinic benefits as well, but fully insured plans in some states are excluded. 

Aetna has a 3.5-star average NCQA rating and a financial strength rating of A with AM Best. The company also came out on top in the East South Central, Northwest, and Southwest regions in the 2023 J.D. Power U.S. Commercial Health Plan Study, but ratings vary by region. Aetna offers SHOP plans in Maryland and D.C.

Blue Cross Blue Shield offers the most options for employers, with many plans providing access to the BlueCard PPO network and 24/7 telehealth, along with a variety of funding options in some states. If you’re looking for a self-funded plan, Aetna offers the best option tailored to small businesses in many states, as well as CVS benefits and optional robust behavioral health benefits. Kaiser Permanente takes the cake for customer satisfaction, with high third-party ratings and great digital tools, while UnitedHealthcare’s unique FlexWork program makes it our top pick for nontraditional employees. 

When choosing small business health insurance, you have a few options, according to Robert Slayton, an employee benefits consultant. 

Small Group Health Insurance

One option is to purchase a small group plan directly from a commercial health insurance company that serves small businesses or through a broker. “It gives the employer control over which plans to offer and [assurance] that people will remain covered while employed,” said Slayton. However, you may also need to offer COBRA or mini-COBRA plans. Mini-COBRA plans are required by some states for companies with fewer than 20 employees.

Self-Funded Plan

You may be able to save money by taking on the responsibility of paying out employee health claims yourself. This is known as a self-funded or self-insured plan, which typically relies on a commercial health insurer to administer the provider network and provide assistance with enrollment and claims processing. 

Health Reimbursement Arrangement (HRA) 

Another option is for the employer to offer a health reimbursement arrangement (HRA), which is an employer-funded group plan that pays employees back for qualified health expenses up to a certain dollar amount each year. Expenses may include premiums for an employer-sponsored plan, as well as copays and coinsurance. There are several types of HRAs, including a qualified small employer HRA (QSEHRA) for companies with fewer than 50 full-time employees. Another type is an individual coverage HRA (ICHRA), which lets employees use the funds to buy their own health insurance with pretax dollars. Funds can also be used for copays and deductibles. “[Employers] choose an amount to give each employee so that the employee can purchase coverage on their own,” said Slayton. “Employees who claim this reimbursement must have an underlying individual plan or Medicare.” 

SHOP Plan 

The Small Business Health Insurance Options Program allows you to compare small business plans offered on the ACA Marketplace and offer one or multiple options to your employees. These plans are typically the only route to the Small Business Health Care Tax Credit. However, they’re only offered on the federal marketplace in eight states and on state-run exchanges in 13 states. 

Frequently Asked Questions

Do small businesses have to provide health insurance.

If you employ fewer than 50 people full-time, you are not required to offer health insurance to your employees. But more than half of firms that size do offer it, according to the National Federation of Independent Business. A 2022 U.S. Chamber of Commerce survey found that 88% of employees rank health insurance as the most important employer-provided benefit. If you have 50 or more employees and choose not to offer coverage that meets federal standards, you’ll be required to pay a penalty called a Shared Responsibility Payment instead.

How Much Does Small Business Health Insurance Cost?

Costs vary by location and the network and coverage you choose, but on average, small businesses contributed $7,349 per single covered employee in 2023. Experts recommend keeping your total employee benefit costs between 10% to 20% of your overall revenue.

What Is a Self-Insured Health Plan?

A self-insured health plan is a type of group health insurance in which the employer collects premiums and is responsible for paying claims when employees need care. These plans can be self-administered, or the business may work with an insurance provider to get stop-loss coverage (which puts a ceiling on your risk) and administrative support. 

There are several benefits to self-funded plans. Employers can keep surplus premiums (or receive a portion returned by the stop-loss carrier), plans can be customized to a greater degree, and certain ACA provisions that lead to high costs can be avoided. Increasingly, small businesses are opting for self-funded coverage. But self-insured plans aren’t right for every business.

Can an S Corp Pay for Health Insurance?

Yes. An S corp can provide health insurance for its employees. However, most health insurance companies require you to have at least two employees to get a group plan, so if you are an S corp owner and don’t have employees, you’ll need to get individual health insurance from the ACA Marketplace. Additionally, you can’t provide an HRA to anyone with a greater than 2% stake in your company.

How We Chose the Best Health Insurance Companies for Small Businesses

We chose the best health insurance companies for small businesses by looking at our research for our list of the overall best health insurance companies and then investigating what options these insurers offer for small businesses looking to buy plans for their employees. 

To identify which health insurance companies to review for our overall winners list, we analyzed business and market insight databases, considered health insurance company market share, and researched user-generated data from Google to determine public interest and trends in health insurance companies and plans. 

We collected data from the National Committee for Quality Assurance (NCQA), an independent organization that rates healthcare plans on quality and patient satisfaction. We also gathered data from state and federal government insurance marketplace websites and databases, and directly from companies via websites, media contacts, and existing partnerships. The data collection process took place between Sept. 29 and Oct. 23, 2023.

We then developed a quantitative model that scores each health insurance provider based on 27 criteria that fall into four major categories and are crucial in evaluating the company’s offerings and benefits. We weighted the four categories as follows for this article:

  • Plan Quality & Customer Satisfaction : 20%
  • Plan Features : 40%
  • Availability : 15%

Read our full methodology for reviewing health insurance companies.

J.D. Power. “ Commercial Health Plan Member Satisfaction Declines in Key Areas, J.D. Power Finds. ”

The Commonwealth of Massachusetts. " MiniCobra Continuation of Coverage Benefits Guide ."

Healthcare.gov. " What's An Individual Coverage Health Reimbursement Arrangement (HRA)? "

Healthcare.gov. “ SHOP Marketplace Basics for Employers .”

U.S. Department of Health and Human Services. “ As a Small Business Owner, Am I Required to Offer Health Insurance to My Employees? ”

KFF. " 2023 Employer Health Benefits Survey (Section 6) ."

health insurance laws for small business

  • Terms of Service
  • Editorial Policy
  • Privacy Policy
  • Your Privacy Choices

feel free to give us a call   512-643-4173

512.643.4173

feel free to give us a call at 512-643-4173

Sort by topic:

health insurance laws for small business

Dealing with Small Business Health Insurance: Compliance and Its Importance

Introduction to small business health insurance.

In the ever-evolving landscape of small businesses, the significance of health insurance cannot be overstated. For small businesses, providing health insurance is not only a gesture of employee welfare but also a strategic business decision with far-reaching benefits. Navigating through the regulations and norms related to health insurance is essential for compliance and ensuring the well-being of both the business and its employees.

The Necessity of Health Insurance for Small Businesses

For small businesses, health insurance serves as a crucial tool in attracting and retaining talented employees. Beyond the obvious health benefits, it instills a sense of security among employees, which, in turn, enhances productivity and loyalty. In this regard, understanding the requirements and benefits associated with business health insurance becomes imperative for any small business owner.

Overview of Regulations and Industry Norms

The landscape of health insurance in small businesses is governed by a myriad of regulations and industry norms. Familiarity with these guidelines is essential for ensuring compliance and avoiding potential legal and financial repercussions. Key among these regulations is the Affordable Care Act (ACA)  which has significantly impacted the way small businesses approach health insurance.

Compliance with Health Insurance Laws in Small Businesses

Navigating the complex landscape of health insurance laws.

Compliance with health insurance laws in small businesses is an intricate and crucial aspect of business operations. It involves navigating a complex web of federal and state regulations that can be daunting for small business owners. These laws are designed not only to ensure legal adherence but also to safeguard the well-being of employees. Small businesses, therefore, must be adept at understanding and applying these laws to their specific situations.

Comprehensive Overview of Pertinent Laws

Understanding the pertinent laws is critical for compliance. This includes not only federal mandates like the Affordable Care Act (ACA) but also state-specific regulations that can vary significantly. The ACA, for example, imposes different requirements on businesses based on factors such as size, with distinct guidelines for those with more or less than 50 full-time employees. Additionally, state laws may impose additional or alternative requirements, making it vital for small businesses to be aware of the regulations specific to the states in which they operate.

Grasping the Nuances

Compliance is not a one-size-fits-all process. The nuances of laws like the ACA require small businesses to assess their specific situations carefully. Factors such as the number of employees, the type of coverage offered, and other business-specific variables play a crucial role in determining the exact requirements for each business. Understanding these nuances is paramount for ensuring that a business is fully compliant and not inadvertently at risk of violating the law.

Impact of Non-Compliance

The consequences of non-compliance can be severe and multifaceted. Legal penalties, such as fines and sanctions, are just the tip of the iceberg. Non-compliance can also lead to damaged business reputations, which can have long-term detrimental effects on customer trust and employee morale. Case studies of businesses that have faced challenges due to non-adherence are stark reminders of the importance of compliance. These examples serve as valuable lessons for other businesses to understand the potential risks and repercussions.

Proactive Strategies for Compliance

Maintaining compliance is an ongoing process that requires a proactive approach. Staying informed about the latest changes in laws and regulations is essential. This can be achieved through various means, such as subscribing to relevant legal updates, attending seminars, or joining business associations. Seeking professional advice, either through legal counsel or specialized consultants, can also provide businesses with tailored guidance and help navigate the complexities of health insurance laws.

Specific Laws for Employer's Compliance

Mandated laws for health insurance.

Under federal regulations, businesses with 50 or more full-time employees (FTEs) fall under the Employer Shared Responsibility Provisions. This mandates them to provide health insurance under the Affordable Care Act (ACA). Determining what qualifies as a full-time employee is critical here. Full-time status is typically defined as working 30 hours or more per week or 130 hours per month on average. Employers must also consider part-time employees' hours when calculating the number of FTEs , as this could push a business into the category requiring mandated health coverage provision. This calculation is particularly important for businesses near the 50-employee threshold. Additionally, the offered health insurance must meet minimum value standards and be affordable to employees based on their household income, to avoid potential penalties.

The Affordable Care Act and Small Businesses

The ACA's impact on small businesses is multifaceted. While businesses with fewer than 50 full-time equivalent employees are not required to provide health insurance, they are incentivized to do so through the Small Business Health Options Program (SHOP). SHOP offers various plans and flexibility, catering to small businesses' specific needs. Moreover, small businesses that choose to provide health insurance may qualify for the Small Business Health Care Tax Credit, making it more financially feasible. This credit is available to companies with fewer than 25 full-time equivalent employees who pay average annual wages of less than $50,000 (adjusted annually for inflation) and cover at least 50% of their full-time employees' premium costs. Thus, while not mandated by law, participating in SHOP and providing health insurance can be financially advantageous for smaller businesses, along with boosting employee morale and aiding in talent retention.

State Laws and Their Implications

State-specific health insurance laws can profoundly influence how small businesses operate within their jurisdiction. States may have additional requirements or variations in health insurance provisions. For instance, some states have their own mandates for health insurance coverage that expand upon federal requirements. These can include lower thresholds for the number of employees necessitating coverage or broader definitions of who qualifies as a dependent. States may also offer additional health insurance marketplaces or programs tailored to small businesses, providing more options beyond federal programs like SHOP. Furthermore, state laws can dictate aspects such as the required benefits that must be included in health insurance plans, contributing to the complexity of compliance. It's crucial for small business owners to not only comply with federal laws but also to be acutely aware of and compliant with the health insurance laws specific to the states in which they operate. This dual level of compliance ensures legal adherence and maximizes the benefits and opportunities available for both the business and its employees.

Steps to Ensure Compliance

Implementing necessary measures.

To ensure compliance with health insurance laws, small businesses must adopt a structured approach. This involves several key aspects:

  • Understanding Employee Thresholds : It's crucial to know the minimum number of employees required for health insurance provision. This threshold varies based on the jurisdiction and specific health insurance laws applicable to the business.
  • Defining Full-Time Equivalents (FTEs) : Businesses should accurately define and calculate their full-time equivalents. FTEs play a vital role in determining eligibility and requirements for health insurance coverage under various laws and regulations.
  • Keeping Updated with Legislation : Health insurance laws can frequently change. Staying informed about these changes is essential for ensuring ongoing compliance.
  • Record-Keeping and Reporting : Proper documentation and record-keeping are vital. This includes maintaining employee records, insurance coverage details, and any compliance-related correspondences.

Benchmarking Best Practices

Adopting best practices from other successful small businesses is beneficial:

  • Learning from Peers : Engaging with peer networks or industry associations can provide insights into effective health insurance strategies.
  • Balancing Coverage and Costs : Striking a balance between offering comprehensive health insurance and managing operational costs is critical. It involves comparing different insurance plans, understanding their benefits versus costs, and choosing the one that best fits the business needs and budget.
  • Employee Involvement : Involving employees in the decision-making process can lead to more acceptance and satisfaction with the health insurance provided.

Utilizing Professional Help

Seeking professional assistance offers several advantages:

  • Expertise and Guidance : Health insurance consultants or brokers have specialized knowledge that can help navigate the complex landscape of health insurance laws and options.
  • Customized Solutions : Professionals can provide tailored solutions that align with the specific needs and constraints of the business.
  • Focus on Core Business : By delegating the intricacies of health insurance compliance to experts, business owners can concentrate on core business activities, fostering growth and stability.
  • Risk Mitigation : Professional help can also play a crucial role in identifying potential compliance risks and implementing measures to mitigate them, thus avoiding costly legal issues.

Importance of Compliance in Business Health Insurance

Implications of non-compliance.

The repercussions of failing to comply with health insurance regulations are extensive and serious. Legally, businesses could face lawsuits or government penalties, which are not only financially burdensome but can also tarnish the company's public image. Furthermore, neglecting employee health insurance needs can lead to decreased morale and productivity, as employees may feel undervalued or unprotected. These factors can collectively damage a company's reputation both internally and externally.

Benefits of Adherence

Adhering to health insurance laws brings several advantages. Primarily, it fosters a sense of security and well-being among employees, leading to higher job satisfaction and retention rates. This, in turn, enhances the company's reputation as a responsible and caring employer. Additionally, compliance often qualifies businesses for financial perks such as tax credits, which can mitigate the costs of providing health insurance. These benefits can significantly contribute to an attractive workplace culture and a positive public image.

Long-term Effects on Business Growth

Over time, compliance with health insurance laws is a key driver for the sustainable growth and longevity of a business. It establishes a foundation of trust and reliability with employees, which is crucial for a company’s reputation and operational stability. A business perceived as caring and responsible is more likely to attract and retain top talent, fostering a productive and loyal workforce, essential for long-term success.

The Economic Impact of Compliance

Financial consequences of non-compliance.

Ignoring health insurance regulations can lead to hefty financial penalties. For small businesses, these fines can significantly impact their financial health and stability. The cost of non-compliance extends beyond just penalties; it can also include legal fees and lost productivity due to employee dissatisfaction. Small businesses need to prioritize compliance to avoid these potentially crippling financial setbacks.

Financial Gains of Proper Compliance

On the flip side, proper adherence to health insurance laws can lead to economic benefits. Small businesses may qualify for tax credits, effectively reducing the overall cost of providing health insurance. These financial incentives can make offering health benefits more manageable and cost-effective, especially for small businesses operating with tighter budgets.

Evaluating Cost-Effectiveness

Assessing the cost-effectiveness of providing health insurance requires a comprehensive analysis of various factors. Businesses must consider the costs of premiums and the range of coverage options, balancing these against the financial health of the company. It's essential to weigh the direct costs of the health plan against the indirect benefits, such as employee satisfaction, retention, and productivity. A well-planned health insurance program should meet employee needs without compromising the business’s financial goals, thereby supporting a stable and prosperous business environment.

The Social and Ethical Impact of Compliance

Moral and social obligations.

Providing health insurance transcends mere financial implications, embodying a business's dedication to social and ethical duties. Supplying quality health care access is integral in nurturing a constructive and efficient workplace. It's not just a legal requirement but a moral imperative, reflecting the company's values and commitment to its staff's welfare. By fulfilling this duty, businesses play a crucial role in upholding societal standards and promoting public health.

Ethical Business Practices and Workplace Health

Adhering to health insurance regulations is a cornerstone of ethical business conduct. This practice is essential in establishing a healthy and supportive work environment, where employees feel secure and valued. The benefits extend beyond the workforce; they positively influence the company's reputation, portraying it as a caring and responsible entity. Such ethical practices are increasingly valued in today's socially conscious market, attracting not only potential employees but also customers and business partners who prioritize corporate responsibility.

Insurance Compliance and Employee Engagement

Complying with health insurance mandates significantly impacts employee engagement and loyalty. Workers are more likely to feel appreciated and devoted to an organization that shows genuine concern for their health and well-being. This, in turn, leads to increased employee retention, reduced absenteeism, and a more vigorous and committed workforce. The effect of such compliance resonates beyond the office walls, contributing to a healthier community and demonstrating the business's role as a socially responsible entity. Enhanced employee morale and engagement are not just beneficial for the individuals but are also catalysts for improved productivity and business success.

In conclusion, compliance with health insurance laws is not just a legal requirement for small businesses; it is a fundamental aspect of responsible business ownership. Understanding and adhering to these regulations can lead to numerous benefits, including financial incentives, improved employee morale, and enhanced business reputation. By prioritizing health insurance compliance, small businesses can create a positive and productive work environment, contributing to their long-term success and sustainability.

Beginner's guide to achieving fitness goals with realistic planning, personal assessment, and sustained motivation.

The latest news and information from the world's most respected news source. BBC World Service delivers up-to-the-minute news, expert analysis, commentary, features and interviews.

BBC World Service

Listen live.

NPR's Morning Edition takes listeners around the country and the world with two hours of multi-faceted stories and commentaries that inform, challenge and occasionally amuse. Morning Edition is the most listened-to news radio program in the country.

Morning Edition

NPR's Morning Edition takes listeners around the country and the world with two hours of multi-faceted stories and commentaries that inform, challenge and occasionally amuse. Morning Edition is the most listened-to news radio program in the country.

  • Health Care

Some New Jersey patients can’t access medicine due to insurance hurdles. A new law is trying to speed up the prior authorization process

When a law passed this january takes effect next year, health insurance companies will have three days — or sometimes 24 hours — to decide on prior authorization..

health insurance laws for small business

Sandra Johnson (left) is a patient who’s suffered because of prior authorization delays with Catherine Trillo (right), a registered nurse who deals with prior authorization at work. (Kimberly Paynter/WHYY)

Sandra Johnson

Related Content

Angry customer complaining about barista in coffee shop. (Bigstock/tonefotografia)

Can de-escalation strategies help angry customers stay calm?

Staff at restaurants, shops, airlines, faced much more anger during the pandemic. Many organizations offer de-escalation training. But does it work?

Catherine Trillo

How U.S. health care providers deal with hundreds of data breaches every year

Cyberattacks on health care providers in the U.S. have gone up steadily over the last decade, exposing the personal health data of millions of patients.

2 weeks ago

Ward Sanders represents the health insurance companies in this debate, as the president of the New Jersey Association of Health Plans.

He said it’s good that the law requires faster decisions, but added that prior authorization is not just red tape — the process is in place for a reason.

“The goal of prior authorization is to provide the right care at the right time and the right setting and to allow for the efficient allocation of resources.”

He said, for example, insurance companies will sometimes ask doctors to consider cheaper drugs that achieve the same therapeutic effect. He pointed to a line in New Jersey’s state budget documents last year saying that prior authorization saved the state health insurance program for public employees almost $100 million.

This debate will continue. New Jersey was the second state to pass this kind of legislation after  Washington state , but there are more than 20 states with similar bills going through the legislative process.

health insurance laws for small business

Get daily updates from WHYY News!

The free WHYY News Daily newsletter delivers the most important local stories to your inbox.

WHYY is your source for fact-based, in-depth journalism and information. As a nonprofit organization, we rely on financial support from readers like you. Please give today.

You may also like

A close-up of a health insurance coverage form being held by someone.

New Pennsylvania program will review health insurance denials when people lose out on coverage for care

The Independent External Review program will take cases from people who believe their insurer has incorrectly denied them health care coverage.

4 weeks ago

New Jersey Gov. Phil Murphy

New Jersey already protects abortion rights. Now Democrats want to cover out-of-pocket costs, too

New Jersey's Democratic-led state government is considering legislation that would eliminate out-of-pocket costs for abortion.

Affordable Care Act health insurance marketplace navigator Leticia Chaw, right, helps gather information for Jennifer Sanchez

Pennsylvania extends ACA open enrollment final deadline for Pennie health insurance plans

Pennsylvanians who select health insurance plans this month by the final deadline will get coverage starting on Feb. 1.

1 month ago

About Alan Yu

Alan Yu

Want a digest of WHYY’s programs, events & stories? Sign up for our weekly newsletter.

Together we can reach 100% of WHYY’s fiscal year goal

The Motley Fool

How to Choose a Health Insurance Plan for Your Small Business

A s a small business owner, you're no doubt aware that it's important to not only attract solid talent, but do what you can to retain talented employees. And a good way to do that is to make sure you're offering a nice benefits package. That package might include a retirement savings plan you help contribute to, paid vacation time, and health insurance.

Now, you should know that if you run a business with fewer than 50 full-time employees, you're technically not required to provide health insurance. But that doesn't mean you shouldn't.

Healthcare can be an astronomical expense in the absence of insurance. And even if you're willing to raise salaries in lieu of providing insurance, you may find that prospective employees are turned off by the prospect of having to go out and purchase health coverage themselves.

Of course, choosing a health plan for your business isn't exactly an easy thing to do. Here are some tips for navigating the process.

1. Decide how much you're willing and able to spend

Within the realm of small business health insurance, there's a range of plans. As you might imagine, costlier plans tend to offer superior coverage, while those that are less expensive don't offer as much to participants.

It's important to be realistic about how much you can afford to spend on health insurance. As a smaller operation, you can't benefit from the bulk rates a company with 12,000 employees might snag. So you'll need to take a look at your banking records and see what's realistic, keeping in mind that you'll likely be picking up a large share of those premium costs.

2. Figure out if you want a high-deductible insurance plan

High-deductible health insurance plans can be burdensome for participants -- especially those with family members who tend to get sick often. But the costs for these plans can be more reasonable, as plans with higher deductibles tend to come with lower premiums. That's something to keep in mind if you'll be covering those premiums at 100%.

Also, if you offer a high-deductible plan, it may allow you to offer a health savings account in conjunction with that plan. That could make it easier for your employees to cover their medical costs while reaping tax savings.

3. Consider partnering up with an insurance broker

As a small business owner, you may not be all that well-versed on health insurance options. But it's the job of an insurance broker to walk you through your options and do research on your behalf, so you can focus on running your business. Not only might an insurance broker help you find the right plan, but they can generally help you get set up so you don't find yourself lost in a sea of paperwork.

Whether a health insurance plan is something you're looking to offer because it's a requirement or because it's a benefit you want to provide, it's important to find the best plan for your company. Take your time in making that decision so you and your employees wind up happy with it.

Alert: highest cash back card we've seen now has 0% intro APR until 2024

If you're using the wrong credit or debit card, it could be costing you serious money. Our experts love this top pick , which features a 0% intro APR until 2024, an insane cash back rate of up to 5%, and all somehow for no annual fee. 

In fact, this card is so good that our experts even use it personally. Click here to read our full review for free and apply in just 2 minutes. 

Read our free review

We're firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy .

How to Choose a Health Insurance Plan for Your Small Business

The 10 best insurance companies for small businesses

Running your own business can be satisfying with the perks of being your own boss, higher potential of success, and independence. But it also has its own challenges and stresses. One of the most significant challenges is protecting your business from liabilities or losses, which is why small business insurance is so important. Whether you’re the victim of a data breach or a customer is injured on your premises, the right insurance policy provides peace of mind and keeps your business operational.

To help you find the best insurance for your company, we evaluated 22 insurance companies based on their available coverages, customer service and financial stability ( view our full methodology ) and identified the top 10 small business insurers.

The 10 best small business insurers of February2024

  • Best overall: State Farm
  • Best for customer service: Nationwide
  • Best for financial stability: Chubb
  • Best for commercial auto coverage: Allstate
  • Best for coverage add-ons: The Hartford
  • Best for landlord coverage: American Family
  • Best for data breach or cyber insurance: Travelers
  • Best for policy discounts: Farmers
  • Best for home-based businesses: The Hanover
  • Best insurance marketplace: CoverHound

Whether you’re a solopreneur or you manage a growing team, running your own small businesses is a booming trend. The Economic Innovation Group reported that Americans submitted 5.5 million new business applications in 2023, an increase of 8% from the prior year. 

For new business owners and those who have been managing a company for years, it’s a good idea to shop around periodically and review your business insurance needs to ensure you have adequate coverage. To help you get started, here are our picks for the best small business insurers of 2024.

1. Best overall: State Farm

About: Founded in 1922, State Farm has been providing insurance coverage for over 100 years, and it has an outstanding reputation in the insurance industry. It has the highest-possible AM Best Financial Strength Rating of A++, signaling its financial stability and reliability, but it also stands out due to its innovative products, award-winning mobile app, online platform, and other tools. And it also has high scores for customer support. 

  • Am Best Rating: A++ (Superior) 
  • J.D. Power Customer Satisfaction Index Ranking: 2nd out of 13 issuers
  • Number of Small Business Products: 14 small business insurance products and add-ons
  • Customer support:  State Farm’s customer support is available via chat or phone, or you can contact a local agent; State Farm has over 19,000 agents in the U.S. 

Our verdict

State Farm is best for companies in a broad range of industries, from bakeries to plumbing. It is particularly useful for newer companies or business owners who are unsure of what kind of coverage they need; State Farm has several tools— including a simple online quiz— that can help you identify what insurance products and add-ons are right for your business. State Farm has comprehensive solutions, including coverage for liabilities, property, employees and even life insurance for the business owner. 

2. Best for Customer Service: Nationwide

About: Nationwide has been in operation since 1925, and it provides customers with a variety of insurance products, including both personal and business coverage options. For small business owners, Nationwide offers a broader-than-usual range of insurance solutions, including business liability coverage, workers’ compensation insurance and commercial umbrella policies. 

  • Am Best Rating:   A (Excellent) 
  • J.D. Power Customer Satisfaction Index Ranking: 1st out of 13 issuers
  • Number of Small Business Insurance Products: 14 
  • Customer support:  Nationwide allows business owners to get quotes online, or you can connect with an agent over the phone or in person. 

Our verdict 

Nationwide is best for small business owners with fewer than 100 employees and under $5 million in revenue because that’s the company’s requirements for its business owners policies (BOPs).  BOPs are packages of coverage that combine business liability, commercial property, business income and equipment breakdown insurance into one policy. 

Nationwide has an outstanding reputation for customer service, and you can reach customer support in several different ways. Additionally, the company has many optional add-ons you can use to customize your policy for added protection. 

3. Best for Financial Stability: Chubb

About: Chubb is a major insurer for both small and large businesses. It has a separate website and division for small businesses, with products specifically designed for small business owners, such as BOP and general liability coverage. 

  • AM Best rating: A++ (Superior) 
  • J.D. Power Customer Satisfaction Index Ranking: 9th out of 13 issuers
  • Number of small business insurance products: 7
  • Customer support:  You can contact Chubb customer support through a local agent or by phone.

As a business owner, you hope your business will be in operation for years to come, so you want to know your insurer will be able to protect you for the long-term. Chubb has the highest-possible AM Best rating of A++ (Superior), indicating that it should be able to honor any claims today and in the future.

4. Best for Commercial Auto: Allstate

About: Allstate is known for both its personal and business insurance, but it may be an especially appropriate choice for those who need commercial auto coverage. Allstate insures a wide variety of vehicles, including box trucks and service utility trucks. 

  • AM Best rating:   A+ (Superior)
  • J.D. Power Customer Satisfaction Index Ranking: 5th out of 13 issuers
  • Number of small business insurance products: 6
  • Customer support: Customer service is available through a local agent, phone or online chat. 

If you have a fleet of commercial vehicles for deliveries, moving inventory or shipping supplies, Allstate can provide necessary protection. Through Allstate, your vehicles will be protected with liability, collision, comprehensive and uninsured/underinsured motorist protection. Plus, you can also get rental car coverage to keep your business in operation if one of your vehicles is damaged in an accident 

5. Best Coverage Add-Ons: The Hartford  

About: The Hartford is a leading commercial insurance provider, offering both commercial business insurance and employee benefits. The Hartford has robust coverage options, including specialized insurance policies for a broad range of industries and optional add-ons you can use to customize your coverage. 

  • AM Best rating: A+ (Superior)
  • J.D. Power Customer Satisfaction Index Ranking: 10th out of 13 issuers
  • Number of small business insurance products: 17
  • Customer support:  The Hartford’s customer support is available through phone or local agent.

The Hartford is an insurance company best-suited for business owners in specialty industries, such as shipping companies that send goods overseas or those that operate in areas prone to flooding; the Hartford has commercial flood insurance and inland marine insurance options, which aren’t commonly found from all insurers. 

6. Best Landlord Coverage: American Family

About: American Family has been in operation since 1927, and it sells personal, business and farm and ranch policies. For landlords that rent out houses, condos or apartment buildings, American Family has unique options to protect your building structures, and offer liability coverage. 

  • J.D. Power Customer Satisfaction Index Ranking: 7th out of 13 issuers
  • Customer support:  You can reach American Family’s customer support through an agent or by phone. 

Getting adequate coverage as a landlord can be challenging, so American Family may be a valuable resource. Its complete coverage option for landlords provides comprehensive insurance, and includes an extensive loss control program to reduce potential losses in the future. 

7. Best for Data Breach or Cyber Insurance: Travelers

About: Travelers has a longstanding history and presence globally; it operates offices and has agents in the U.S., Canada, the United Kingdom and Ireland. Besides essential business insurance products like business owner’s policies and general liability, it also has specialized options for a range of industries, including companies who do most of their business online and need cyber insurance. 

  • AM Best rating: A++ (Superior)
  • J.D. Power Customer Satisfaction Index Ranking: 12th out of 13 issuers
  • Number of small business insurance products: 14 
  • Customer support:  Travelers insurance policies are sold through independent agents, and the agent is who you can go to with any questions about coverage.

If you’re part of the 29% of businesses that conduct business online, Travelers provides cyber insurance coverage and added features for digital businesses.  In addition to cyber insurance, it also provides customers with cyber security training modules, risk assessment tools and other resources to help you protect your business. 

8. Best for Policy Discounts: Farmers

About: Farmers Insurance can trace its history to 1928, and it offers a variety of business insurance products for small businesses. And it has a larger-than-usual number of discount options which can make your small business insurance policy more affordable, including: 

Corporation discount: If your business is a corporation, you can save 15% on your premiums. 

Vehicle safety discount: If you have commercial vehicles with safety features like lane departure notifications, you may qualify for added savings. 

Multi-policy discounts:  If you purchase multiple insurance products, such as BOPs, worker’s compensation or personal auto or homeowners insurance, you may qualify for a reduction in your premiums. 

  • AM Best rating: A (Excellent)
  • J.D. Power Customer Satisfaction Index Ranking: 4th out of 13 issuers
  • Customer support: Farmers’ customer support is available via chat, phone or agent. You can reach customer service Monday through Friday, from 7:00 a.m. through 11:00 p.m. CST, and Saturday and Sunday from 8:00 a.m. through 8:00 p.m. CST. 

Small business owners looking to save money may benefit from Farmers’ small business insurance. Particularly if you have a corporation, need to purchase a BOP or have commercial auto vehicles, Farmers’ discounts can be especially valuable. 

9. Best for Home-Based Businesses: The Hanover

About: Founded in 1852, The Hanover is one of the oldest insurance companies on our list. It has coverage options for both personal and business insurance. The company has several specialized small business insurance products, including four separate packages for those who run home-based businesses. 

  • AM Best Rating: A (Excellent)
  • J.D. Power Customer Satisfaction Index Ranking: Not rated 
  • Number of small business products: 12
  • Customer support:  Customer support is available via phone or agent. 

If you have a home-based business, such as listing your property on homeshare sites, tutoring or graphic design, The Hanover could be a good match. It has several packages designed for the unique needs of home-based businesses of different sizes, ensuring you have protection for your business, inventory, equipment and any clients. 

10. Best Insurance Marketplace: CoverHound

About: CoverHound is an insurance marketplace that connects users to personal and business insurance policies. It sells policies to residents of all 50 states, and it partners with major insurers like Chubb, Liberty Mutual and Nationwide. 

  • Number of small business products: 13
  • Number of partner carriers: 7
  • Customer support: You can reach CoverHound’s customer service team via email, phone or secure message. Customer support is available Monday through Friday, from 10:00 a.m. through 8:00 p.m. EST. 

CoverHound is a good match for people looking to purchase coverage quickly and streamline their research efforts; you can get quotes from several major insurer carriers at once. Once you find a match you like, you can buy a policy online, and it will go into effect in as little as 24 hours.

What to know about Small Business Insurance  

As a business owner, you likely need some kind of small business insurance. But what kind of coverage depends on the type of business you run, its size and its revenue. 

The most common small business insurance products include: 

  • Business owner’s policy (BOP): A BOP is a basic package of business insurance products combined into one policy. It combines essentials like property insurance, liability coverage and business interruption insurance. 
  • Commercial auto: If you make deliveries, transport clients or use vehicles for other business operations, you’ll likely need a commercial car insurance policy. 
  • Liability insurance: Liability insurance protects you against lawsuits resulting from bodily or personal injuries or property damage incurred by clients or vendors in dealing with your business.  
  • Property insurance: Property insurance is a must if you have valuable equipment, supplies or a physical business space; it protects you from losses that may occur due to storm damage, fires or theft. 
  • Workers compensation : If you have employees, you’ll likely need to get workers’ compensation coverage to protect your employees in cases of work-related injuries or illnesses. 
  • Errors and omissions (professional liability) insurance: Businesses that give advice, such as financial planners, or provide physical care need professional liability insurance. It covers your legal expenses and other fees if you’re sued due to negligence or a failure to provide services. 

Besides those basic coverage options, you can often customize your policy by adding additional coverages to your policy. Common add-ons include: 

  • Cyber liability: If you do most of your business online, handle sensitive information or store customer data like email dresses or payment information, you’ll need a cyber liability policy. These policies provide protection in cases of hacks or data breaches that compromise sensitive information. 
  • Business interruption insurance: If your business operations are interrupted and you lose revenue for a covered reason, such as building damage after a fire, business interruption coverage provides you with some compensation. 

How to choose a small business insurance company

To choose a small business insurer, consider the following factors: 

  • Company size: Some insurers specialize in policies for freelancers or solopreneurs, while others may offer policies to businesses with 20 to 100 employees. Your company size — and how much you expect it to grow — will affect which insurer is a good fit. 
  • Equipment and buildings: If your business operations involve a brick-and-mortar store or warehouse, equipment, vehicles and several employees, you’ll need a much more robust policy than someone operating a small, online business from their home office. Depending on your company’s operations, you may even need specialized coverage add-ons, such as cyber insurance or commercial auto coverage. 
  • Risks: Businesses vary in risk based on their industry and business model. For example, an academic tutoring business will likely have less of a liability risk than a roofing company. Think about what risks your company faces, such as what kind of equipment you work with, how often clients or customers will come onto your property and if you handle sensitive information. 
  • Cost: Small business insurance can vary significantly in cost between companies, so it’s a good idea to get quotes from several leading small business insurers to find the best deal. 

If you’re still unsure about which types of insurance products are right for you, take a look at our comprehensive guide to small business insurance .

Frequently asked questions

What does business insurance cover.

Business insurance coverages and exclusions vary by policy; a basic BOP covers the following: 

  • Property insurance for the business’ buildings and equipment
  • Business interruption insurance for the loss of earnings that may occur from fires, storm damage or other major disasters
  • General liability protection that covers your legal responsibility if another party is injured or experiences damages from your business

What is general liability insurance? 

General liability protects you from losses related to injuries, property damage or misleading advertising. If you have clients who visit your business premises — and therefore are at risk of becoming hurt in an accident on your property — general liability coverage is a necessity. 

How much does business insurance cost? 

The cost of coverage depends on a wide range of factors, including your company size, industry and location. In general, you should expect to pay anywhere from $500 to $5,000 per year for a basic business owners policy (BOP). 

Our methodology  

We reviewed 22 insurance providers and insurance comparison marketplaces to help you find the best small business insurer for your unique needs. To evaluate the companies and come down with our final list, we ranked the companies based on the following factors: 

  • Financial stability: We looked for companies with AM Best Financial Strength Ratings of A (Excellent) or better. 
  • Availability and eligibility: Preference was given to companies that issue policies in the majority of the U.S. states., and that insured companies with one to 100 employees. 
  • Product options: We looked for companies that offered at least 10 small business insurance products, including essentials like BOPs, commercial liability and business property coverage. 
  • J.D. Power ranking: Companies with scores above the study average were given extra weight. 
  • Online quote availability: Companies that allow customers to get small business insurance quotes were given additional consideration. 
  • Complaint index: We reviewed the complaint index, number of commercial liability complaints and types of complaints submitted about each company to the National Association of Insurance Commissioners (NAIC). 
  • Potential discounts: We looked for companies that offered at least one discount option for small business insurance customers. 

Follow Fortune Recommends on  Facebook  and  Twitter .

EDITORIAL DISCLOSURE : The advice, opinions, or rankings contained in this article are solely those of the Fortune Recommends ™ editorial team. This content has not been reviewed or endorsed by any of our affiliate partners or other third parties.

Guide to small business insurance

5 best small business insurance companies in california of 2024, 5 best small business insurance companies in new jersey of 2024, a comprehensive guide to small business insurance: here's how to safeguard your company.

An official website of the United States government

Here's how you know

Official websites use .gov A .gov website belongs to an official government organization in the United States.

Secure .gov websites use HTTPS A lock ( ) or https:// means you've safely connected to the .gov website. Share sensitive information only on official, secure websites.

health insurance laws for small business

IMAGES

  1. Why You Should Invest In Health Insurance for Small Business Employees

    health insurance laws for small business

  2. A Guide to Small Business Health Insurance [Requirements]

    health insurance laws for small business

  3. A Guide to Small Business Health Insurance

    health insurance laws for small business

  4. Small Business Health Insurance: A 2024 Guide

    health insurance laws for small business

  5. Best Health Insurance Options for Small Businesses r Startups

    health insurance laws for small business

  6. Small Business Health Insurance

    health insurance laws for small business

COMMENTS

  1. Small Business and the Affordable Care Act (ACA)

    The Affordable Care Act (sometimes called the health care law, or ACA) established the Small Business Health Options Program (SHOP) for small employers (generally those with 1-50 full-time and full-time equivalent employees (FTEs)) who want to provide health and dental coverage to their employees.

  2. Employers

    Small Employers Small employers, generally those with fewer than 50 full-time employees, may be eligible for credits and other benefits. Large Employers An applicable large employer, generally those with 50 or more full-time employees, including full-time equivalents.

  3. Small Business Health Options Program

    Small Business Health Insurance See Topics SHOP Coverage Why use the SHOP Marketplace? Verify your eligibility for SHOP Small Business Health Insurance Tax Credit How to work with an agent or broker Insurance for multiple locations & businesses Minimum participation rates Appeal a SHOP marketplace decision Additional resources for employers

  4. 2024 Small Business Health Insurance Requirements

    Small businesses offering health insurance must offer it to all eligible employees when they become eligible for coverage, and that eligibility period should not extend beyond 90 days. 5 Health Insurance Options to Consider in 202 4

  5. Small Business Health Insurance Requirements: Understanding New Laws

    You pay at least 50% of your full-time employees' premiums. If you meet these qualifications, you may want to explore the Small Business Health Options Program , or SHOP, to learn more about the tax credits that could be available. Staying up to date

  6. Small Business Health Insurance Requirements

    The small business pays at least 50 percent of employee premiums. The small business buys a SHOP Marketplace Plan on the Marketplace, or from a partner such as eHealth. The amount of the credit you receive works on a sliding scale. Smaller businesses can generally be eligible for a higher health care tax credit.

  7. As a small business owner, am I required to offer health insurance to

    If your business qualifies as small (fewer than 50 full-time employees and full-time equivalents FTEs), you are not required to offer coverage. If you're self-employed, you can sign up for coverage for yourself (and family members) through the Health Insurance Marketplace®.

  8. Health Insurance Guide For Self-Employed & Small Businesses

    The sixth way to get medical insurance as a self-employed individual or small business owner is to purchase a short-term health insurance policy. These policies are not required to provide the same level of coverage as other types of medical insurance plans, but they can be useful for people who need temporary coverage.

  9. Small Business Health Insurance: A 2024 Guide

    Small businesses that have fewer than 50 full-time employees (or the equivalent in part-time workers) do not have to provide health insurance under the ACA, which is sometimes referred to as ...

  10. Affordable Care Act Tax Provisions for Small Employers

    Here are the responsibilities and benefits for small employers under the health care law: Coverage. You can purchase insurance through the Small Business Health Options Program (SHOP). Learn more at HealthCare.gov. Reporting. You must withhold and report an additional 0.9 percent on employee wages or compensation that exceeds $200,000.

  11. Small Business Insurance Needs: What's Required?

    State laws can mandate certain types of business insurance to protect you, your company and your workers. Most states require businesses that have employees, regardless of their activities, to ...

  12. Health insurance for small business

    Learn more about small business insurance from UnitedHealthcare® We can help you navigate insurance for business needs.

  13. What's the Cost of Small Business Health Insurance?

    The average small business owner pays $6,584 a year to cover a single worker's health insurance. For family coverage, that jumps to $16,357. Most employer health plans split the cost of insurance between the company and the worker. Although most small business insurance plans require employers to pay at least half of the total cost of health ...

  14. Best Health Insurance Companies for Small Businesses for 2024

    Best Health Insurance Companies for Small Businesses for 2024. Best Overall: Blue Cross Blue Shield. Best for Customer Satisfaction: Kaiser Permanente. Best for Part-Time and Seasonal Workers ...

  15. Best Small Business Health Insurance Providers Of 2024

    Best Health Insurance Companies for Small Business Owners. Kaiser Permanente - Best Overall. Blue Cross Blue Shield - Best Provider Network. UnitedHealthcare - Best for Breadth of Insurance ...

  16. Small Business

    Top questions Employers Employees Agents & brokers Do I have to offer health insurance to my employees? Do I need Healthcare.gov to enroll in SHOP coverage? What's a plan year? Will my business be automatically re-enrolled in SHOP coverage each year? What if I'm self-employed? How do I make my SHOP insurance payments?

  17. Dealing with Small Business Health Insurance: Compliance and Its Importance

    Overview of Regulations and Industry Norms The landscape of health insurance in small businesses is governed by a myriad of regulations and industry norms. Familiarity with these guidelines is essential for ensuring compliance and avoiding potential legal and financial repercussions.

  18. Small employer health insurance guide

    Note: Texas insurance law defines a small employer as a business with two to 50 employees, regardless of how many hours the employees work. If you provide health insurance, you must offer it to all your employees who work 30 hours or more each week. You must also offer coverage for their dependents.

  19. SHOP Marketplace Healthcare for Small Businesses

    Under the Affordable Care Act, small business owners 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 business healthcare tax credits for their SHOP insurance plans. These credits can lower the cost of your small business health ...

  20. Sole Proprietor Business Insurance: Costs And Types You Need

    The average cost for professional liability insurance for sole proprietors is $61 per month and workers compensation costs an average of $45 per month. Your sole proprietorship business insurance ...

  21. New Jersey legislation aims to cut red tape around health insurance

    A new law that was passed in New Jersey this January aims to address those issues and speed up the process. Once it takes effect next year, health insurance companies have to decide on prior authorization within three days. If a doctor says their patient needs medicine urgently, the insurance company has to approve or deny within 24 hours. WHYY ...

  22. Guide to health insurance for small business employees

    SHOP insurance plans are generally available to small businesses with 1-50 employees. If your employer offers health insurance through SHOP, you'll get offer information from your employer or its insurance company. You don't need a HealthCare.gov account.

  23. Health benefits help SMBs hire and retain workers despite ongoing

    Offering group health coverage is important to small businesses. More than 9 in 10 said it's important, with 69% calling it "extremely important." Health benefits help them hire good workers.

  24. Small Business

    Businesses with 50 or fewer full-time employees are not required to offer group health coverage to their employees. Who regulates group health plans? Fully-insured group health plans issued in the State of Missouri are regulated by the Missouri Department of Commerce and Insurance.

  25. How to Choose a Health Insurance Plan for Your Small Business

    Sponsored Content. Health insurance is an important workplace benefit to offer. Read on for tips on finding the right plan for your business.

  26. The 10 best insurance companies for small businesses

    The 10 best small business insurers of February2024. Best overall: State Farm. Best for customer service: Nationwide. Best for financial stability: Chubb. Best for commercial auto coverage ...

  27. Small Business

    Health coverage for small businesses, their owners, and employees. Explore information and resources to help small employers, sole proprietors, and full- or part-time employees of small businesses make decisions about health insurance coverage.