For employers
Small business health insurance: group plans and CHOICE arrangements
The short answer
You buy a small group plan from an insurance company or a licensed agent, and you can do it any time of year. You need at least one employee who is not an owner or an owner's spouse, and in most states at least 70% of your employees must accept the offer. Coverage can start the first of next month.
A licensed agent calls you at no cost.
Updated and reviewed by the licensed agents at Health Insurance Solutions in Orlando, Florida. How we research and review
Small-Group Health at a glance
- When you can buy
- Any time of year
- There is no open enrollment for a small group plan. Coverage can start the first of next month.
- Who counts as an employee
- Not owners
- You need at least one employee who is not an owner or an owner's spouse.
- Participation rule
- 70% in most states
- At least 70% of your employees must accept the offer. Ask how each insurer counts workers covered elsewhere.
- Average premium, 2026
- $9,804 single
- KFF's yearly average at firms with 10 or more workers. Family coverage averages $28,303. Your quote will differ.
Who is small business health insurance for?
Group health isn't just for big companies. With two employees or forty, we compare small-group plans and alternatives like CHOICE arrangements (formerly ICHRA), explain the participation and contribution rules, and support every renewal.
- Owners with 2 to 50 employees offering benefits for the first time
- Businesses facing a steep renewal increase
- Teams with people spread across several states
What can a small business offer?
Usually included
- A small group plan: you choose one or more plans and pay part of each employee's premium
- A CHOICE arrangement (ICHRA): you give employees a set amount to buy their own plan, with no yearly limit and for any size of employer
- A QSEHRA: a capped yearly amount for employees to buy a plan, for employers with fewer than 50 full time employees and no group plan
- Dental and vision for your team, alongside any of these, and an HSA with a qualified plan
Usually not included
- A group plan for an owner who works alone or only with a spouse. They buy an individual plan instead
- A way around the 70% participation rule, which most states apply to group plans
- The Small Business Health Care Tax Credit with a CHOICE arrangement or QSEHRA. Generally only SHOP group coverage can earn it
- A rule that forces you to offer coverage. Federal law requires it only from employers with 50 or more full time employees, counting full time equivalents
How much does small business health insurance cost?
In KFF's 2026 survey of firms with 10 or more workers, the average yearly premium is $9,804 for single coverage and $28,303 for family coverage. Workers pay about 18% of a single premium and 27% of a family premium on average. Your price depends on your employees, where they live and the plan.
You choose your share
There is no federal rule on how much of the premium you must pay. The tax credit needs at least 50% of employee only premiums.
The tax credit
You may qualify for a credit worth up to 50% of premiums for two consecutive years if you have fewer than 25 full time equivalent employees, average wages under $67,000 (for tax year 2025), pay at least half of employee only premiums and buy through SHOP. It shrinks above 10 employees and $33,000 in average wages.
A budget you control
A CHOICE arrangement or QSEHRA lets you set the monthly amount. For 2026 a QSEHRA is capped at $6,450 for one person and $13,100 for a household.
A quote is the only way to know
Premiums change with age, ZIP code and plan level. We compare several carriers and show you the monthly cost for you and for your employees.
Small business health insurance calculator: employee count and tax credit
Enter your full-time and part-time employees to see your full-time equivalent count, which rules apply to you and what the small business health care tax credit could be worth.How do a group plan, a CHOICE arrangement and a QSEHRA compare?
A group plan is a plan you pick for your team. The other two are defined contribution benefits: you set a dollar amount and each employee buys their own plan. The table uses HealthCare.gov's comparison with 2026 limits.
| Small group plan (SHOP) | CHOICE arrangement (ICHRA) | QSEHRA | |
|---|---|---|---|
| Who can offer it | Generally employers with 1 to 50 employees | Employers of any size with at least one employee other than the owners and their spouses | Generally employers with fewer than 50 full time employees that offer no group plan |
| How the money works | You offer a plan or a choice of plans and pay part of the premium | You set an amount for employees and their dependents if you choose, with no yearly limit | You set an amount up to $6,450 for one person or $13,100 for a household in 2026 |
| What employees need | Nothing extra. They enroll in what you offer | Their own individual health insurance, such as a Marketplace plan | Their own qualifying health coverage, such as a Marketplace plan |
| Small Business Health Care Tax Credit | Possible if you meet the rules | Generally not available | Generally not available |
When might a group plan not be the right choice?
- You work alone or only with your spouse. You cannot buy a group plan, so look at individual coverage.
- Too few employees would accept the offer. If you cannot reach the participation rate, a CHOICE arrangement or a QSEHRA may fit better.
- You have 50 or more full time employees. The employer mandate applies, and a licensed agent should help you decide before you choose an option.
How do we help a small business with health insurance?
Census and budget
Share a simple employee list and what you'd like to contribute.
Side-by-side options
We present group plans from several carriers with clear employer and employee costs.
Setup and renewals
We help with enrollment, new hires, and review your options before every renewal.
Get a free quote
What's your ZIP code?
Plans and prices depend on where you live.
Common questions
How do I get health insurance for my small business?
You buy a small group plan from an insurance company or a licensed agent, and you can do it any time of year. You need at least one employee other than the owners and their spouses, and in most states at least 70% of your employees must accept the offer. For SHOP plans, enrollment goes through the insurer or a Marketplace registered agent, not HealthCare.gov.
When can small business coverage start?
When your group enrollment is received by the 15th of a month, coverage must start no later than the first of the next month. If it is received after the 15th, the latest start is the first of the month after next. A plan cannot make new employees wait more than 90 days.
Does my small business have to offer health insurance?
Not if you have fewer than 50 full time employees, counting full time equivalents. Federal law requires only applicable large employers, those averaging 50 or more, to offer affordable coverage or possibly pay the IRS. For 2027 those payments are $3,780 or $5,670 per employee.
What is a CHOICE arrangement?
CHOICE arrangement is the name CMS and HealthCare.gov now use for the Individual Coverage Health Reimbursement Arrangement, formerly known as ICHRA. The employer sets an amount, employees buy their own individual health insurance, and the reimbursement is not taxed to the employee. There is no yearly limit.
Does my small business qualify for the health care tax credit?
You may qualify if you have fewer than 25 full time equivalent employees, average wages under $67,000 for tax year 2025, pay at least half of employee only premiums and buy through SHOP. The credit is worth up to 50% of premiums for two consecutive years and shrinks above 10 employees and $33,000 in average wages.
How many employees have to join the plan?
In most states at least 70% of your employees must accept your offer before the group can enroll. This is the minimum participation rate. If you have 10 employees, at least 7 must say yes. Ask how each insurer counts employees who are covered somewhere else.
Does it cost extra to use an agent?
No. You do not pay us a fee. Insurance companies pay agents, and a plan costs the same whether you buy through an agent or an insurer. We also help with new hires and review your options before each renewal.
Guides that go deeper
Get group plan prices for your team
A licensed agent compares small group plans and CHOICE arrangements from several carriers and shows you the monthly cost for you and your employees. It costs you nothing.
Sources
Rules change. Confirm dates, limits and eligibility with the source, your state insurance department or a licensed agent before you decide. We last checked these on .
- HealthCare.gov: How to enroll in SHOP insurance(opens in a new tab)
- HealthCare.gov: The Small Business Health Care Tax Credit(opens in a new tab)
- HealthCare.gov: CHOICE Arrangements for small businesses(opens in a new tab)
- HealthCare.gov: Health Reimbursement Arrangements (QSEHRA) for small employers(opens in a new tab)
- IRS: Small Business Health Care Tax Credit and the SHOP Marketplace(opens in a new tab)
- IRS: Employer shared responsibility provisions(opens in a new tab)
- IRS Revenue Procedure 2026-22 (2027 employer shared responsibility amounts)(opens in a new tab)
- KFF: 2026 Employer Health Benefits Survey(opens in a new tab)