Benefitra Video
Affordable Health Plans for Small Businesses
A one-minute video for small employers choosing health coverage, with a written guide to eligibility, the tax credit and plan comparison.
What this video covers
Affordable Health Plans for Small Businesses is a one-minute Benefitra video, published on the Benefitra YouTube channel in November 2024. It is written for owners and managers of small companies who are deciding whether and how to offer health coverage. Going by its title and YouTube description, it covers four themes: plans designed with small-business budgets in mind, flexibility in coverage levels, including dental and vision options, ongoing support from an advisor, and the ability to tailor a plan to a team.
A minute is enough to introduce those themes and not enough to explain how small-employer coverage works. This page fills in the written detail from official sources: who counts as a small employer, which tax credit exists, whether an employer must offer coverage at all, and how to compare plans fairly. This page does not publish prices, because premiums depend on location, plan year, age mix and carrier.
What to take from it
Know whether you count as a small employer
HealthCare.gov describes a small employer as generally one with 1 to 50 employees, which is the group that may be able to offer coverage through the Small Business Health Options Program, or SHOP. Headcount is counted in full-time equivalents, so part-time hours matter. Confirm your count before comparing plans, because it decides which products you can see.
Check the small business health care tax credit
The IRS describes a credit for employers that have fewer than 25 full-time equivalent employees, pay average wages below an inflation-adjusted limit, offer a qualified plan through a SHOP Marketplace, and pay at least 50 percent of the cost of employee-only coverage. The credit is available for two consecutive tax years and shrinks as the company gets larger. Many small employers will not qualify, so check the current IRS rules or ask your tax adviser.
Most small employers are not required to offer coverage
Under the employer shared responsibility provisions, only applicable large employers must offer affordable, minimum-value coverage or risk a payment, and the IRS notes that the vast majority of employers fall below that threshold. Offering coverage is therefore usually a recruiting and retention decision for a small company, not a legal requirement, which gives you room to design the benefit to your budget.
Compare plans on the same page
Ask each carrier for the Summary of Benefits and Coverage, the standard summary built for apples-to-apples comparison, and compare deductibles, copays, coinsurance and the out-of-pocket limit together rather than looking at premium alone. If dental and vision matter to you, ask whether those are included, offered as add-ons or sold as separate policies.
Decide how much of the premium you will cover
The employer contribution is the biggest cost lever you control. A smaller contribution lowers your spend but can leave employees with premiums that make the plan unattractive, while a larger one costs more but makes the offer more attractive to recruits and current staff. Model a few contribution levels with real headcount before you commit to one.
Look beyond the first quote
Fully insured group plans are only one way to fund coverage. Level-funded, self-funded and defined-contribution approaches work differently and suit different risk tolerances, and Benefitra publishes calculators and a funding comparison so you can see the tradeoffs. Treat any single quote, including one inspired by a short video, as a starting point.
Who this small business video is for
Owners, office managers and HR leads at companies with roughly 2 to 50 employees who are choosing a first group health plan, reviewing a renewal, or wondering whether a change of arrangement would help. It also fits startups that have just made their first hire and are learning what that does to their coverage options.
It is less useful for a solo owner with no employees, who is usually in the individual market, or for companies with hundreds of employees, who typically work with a broker on a custom design. If you are self-employed, the Benefitra pages on freelancer and independent coverage may fit better.
What counts as a small employer for health insurance?
HealthCare.gov describes a small employer as generally one with 1 to 50 employees, counted as full-time equivalents. Some states define small group differently for their own markets, so confirm your state’s definition when you request quotes.
Do I have to offer health insurance to my employees?
Usually not. The IRS employer shared responsibility provisions apply to applicable large employers, and the IRS notes that the vast majority of employers fall below that threshold. Confirm your own status with a tax adviser, because it depends on full-time equivalent headcount.
Is there a tax credit for small businesses that offer coverage?
There can be. The IRS describes a small business health care tax credit for employers with fewer than 25 full-time equivalent employees and below-limit average wages that offer a qualified plan through a SHOP Marketplace and pay at least half of employee-only premiums. Eligibility is narrow, so check the current rules.
Does this page list prices for small business plans?
No. Premiums depend on location, plan year, the ages of your employees and the carrier, so the only reliable number is a current quote for your own group.
How should I compare two small business plans?
Put each plan’s Summary of Benefits and Coverage side by side. Compare the deductible, copays, coinsurance and out-of-pocket limit together with the premium, then check that your employees’ doctors are in each network. The cheapest premium is not always the lowest total cost.
What if I only have one or two employees?
HealthCare.gov says that if your business has even one employee other than yourself, a spouse, family member or owner, you may be able to use the SHOP Marketplace to offer coverage. If you have no such employees you are generally treated as self-employed and use the individual Marketplace instead.
Related guides and tools
- Small business health plans: the Benefitra guide for employers with up to 50 employees
- Health insurance calculator: estimate employer and employee costs for your group
- Compare all seven funding paths: fully insured, level-funded, self-funded and more side by side
- Health insurance plans: how Benefitra approaches group coverage
Sources
- HealthCare.gov: coverage for small employers (SHOP)
- IRS: small business health care tax credit and the SHOP Marketplace
- IRS: employer shared responsibility provisions
- HealthCare.gov glossary: Summary of Benefits and Coverage (SBC)
- HealthCare.gov: health insurance plan and network types
General information, not insurance, tax or legal advice. Plan details and eligibility rules change; confirm with the plan documents, the official sources above and a licensed adviser.