More and more people are deciding to become entrepreneurs. Approximately 19% of working-age adults in the U.S. were in the process of starting a business or running a business less than 42 months old, according to the 2023 Global Entrepreneurship Monitor report.
As your business grows and you bring on workers, you may need to provide benefits. Businesses with fewer than 50 employees aren’t required by law to provide health insurance benefits, but health insurance is a highly-desired benefit. To attract and maintain a talented workforce, providing benefits may be essential.
We identified the leading providers based on their availability, plan options and customer satisfaction ratings (see our full methodology):
The 5 best small business health insurance providers for 2024
- Best Overall: Blue Cross Blue Shield
- Best for Added Benefits: Kaiser Permanente
- Best for Micro businesses: UnitedHealthcare
- Best for Small to Midsize Companies: Cigna
- Best for Comparison Shopping: Small Business Health Options Program (SHOP)
*Last updated March 12, 2024
If you’re shopping for coverage, finding the right provider can be daunting. To help you narrow down your options, we selected the five top providers of small business health insurance:
Best Overall: Blue Cross Blue Shield
About: Blue Cross Blue Shield (BCBS) is a corporation made up of 34 independent and locally-operated BCBS companies. Combined, BCBS provides coverage for 114 million people, or about one-third of Americans.
BCBS is a leading provider for small business health insurance, giving coverage to employees of 6.9 million small business employers.
- Minimum number of employees: Varies by state, but typically employers need at least one or two employees
- Availability: 50 states
- Customer support: Customer support is provided by the independent BCBS organization behind the health plan. For example, small businesses in Florida can get coverage through Florida Blue, and they’d contact Florida Blue directly for help with policies and payments. Customer support is reachable through online portals or phone.
Our verdict
Blue Cross Blue Shield is one of the few providers that has insurance options in all 50 states, so it’s a good choice for businesses nationwide. Its independent BCBS companies typically have options for small to midsize companies. Whether you have one employee or 100, you can likely get coverage through BCBS, and you can choose a network plan that fits your budget and employee needs.
Best for Added Benefits: Kaiser Permanente
About: Kaiser Permanente is one of the nation’s largest providers of not-for-profit health plans, serving 12.5 million members. Kaiser isn’t available everywhere; its plans are only available in California, Colorado, Georgia, Hawaii, Oregon, Virginia, Washington, and the District of Columbia.
In states where Kaiser is available, it’s a top-ranked insurer for customer satisfaction. J.D. Power selected Kaiser as the top provider in several states, and its plans are highly rated by the National Committee for Quality Assurance.
- Minimum number of employees: As little as one
- Availability: 8 states and the District of Columbia
- Customer support: Customer service is provided through the Kaiser subsidiary serving your location, but you can typically get help through the online portal or by phone.
Our verdict
If you live in one of the states where Kaiser Permanente operates, it can be a good choice for employers looking to offer robust coverage to their employees as a recruitment or retention tool. With its plans, you can give your employees the convenience of telehealth visits and supplemental benefits, including acupuncture, chiropractic care, and dental and vision coverage.
Best for Micro Businesses: UnitedHealthcare
About: UnitedHealthcare is a major health insurance provider that insures 27.3 million people. It has plan options in all 50 states, including plans for small business owners and individuals. Its small business plans allow employers to give employees multiple options, and it has robust educational tools online you can use to learn more about insurance coverage for small businesses.
- Minimum number of employees: As little as two
- Availability: 50 states
- Customer support: With UnitedHealthcare, there is a small business online portal you can use to get quotes and view plan options. If you proceed with purchasing coverage for your employees, you’ll be connected to a dedicated service representative, and you can get assistance by phone or email.
Our verdict
UnitedHealthcare is best for micro business owners, or those who own a business with fewer than 10 employees. Its small business store is available to small business owners with two to 50 employees, and you can use the tool to get quotes and see what deductible, copay and premium amounts are common in your area. If you find coverage that suits your needs, you can purchase coverage directly through the store.
Best for Small to Midsize Companies: Cigna
About: Cigna is a global health services company with health insurance options for small to mid-sized businesses throughout the country. Its plans include medical, pharmacy and behavioral health benefits, with multiple plan tiers.
- Minimum number of employees: As little as two
- Availability: 50 states
- Customer support: Cigna has an online portal for employers, but you must contact a Cigna Healthcare representative via phone to get details on pricing and plans in your area.
Our verdict
If you have a growing business, Cigna could be a useful option. Whereas some providers only offer coverage for employers with fewer than 50 employees, Cigna has options for small to midsize businesses, allowing you to get coverage for up to 499 employees. Its plans include benefits like virtual care and it offers multiple plan tiers, including high-deductible health plans.
Best for Comparison Shopping: Small Business Health Options Program (SHOP)
About: SHOP is a program that helps small business owners provide health and dental coverage to their employees. It’s available to businesses with between one and 50 full-time employees, and it gives you more control; you can decide to offer your employees one plan, or you can give them a choice of several options.
- Minimum number of employees: As little as one
- Availability: 50 states
- Customer support: You can compare prices and plan online, or you can contact a SHOP broker for personalized assistance.
Our verdict
SHOP is a marketplace that was created through the Affordable Care Act (ACA). Through SHOP, employers can compare plans and prices from leading providers in their area. With SHOP, you can control how much you pay toward employee premiums, and you may be eligible for valuable tax credits that are only available to employers who enroll in SHOP plans.
What to know about health insurance for small businesses
If you are a business owner with 50 or more employees, the law requires you to offer coverage to your employees.
By contrast, those with fewer than 50 employees aren’t required to provide health insurance. But even if you aren’t legally obligated to provide coverage, it can be a smart idea as a recruitment and retention tool. In fact, studies, including one conducted by Avalere Health and funded by the U.S. Chamber of Commerce, have shown that offering health insurance benefits produces a strong return on investment and increased productivity.
You may also qualify for valuable tax credits if you offer health insurance benefits. The Small Business Health Care Tax Credit is worth up to 50% of the costs of your employees’ premiums. To qualify for the tax credit, your business must meet the following criteria:
- You have fewer than 25 full-time employees
- The average annual salary of your workers is about $56,000 or less
- You cover at least 50% of your employees’ premiums
- You offer coverage through SHOP to all of your full-time employees
How to choose a small business health insurance company
When shopping for a small business health insurance provider, consider the following variables:
Employee size: Each provider has its own employee requirements. In general, you’ll need between one and 50 employees to qualify for small business health insurance.
Availability: While some providers offer coverage nationwide, others are more limited in scope, only issuing policies in certain states. Similarly, some plans allow workers to receive care in any state, but some plans have more restrictive local networks.
Customer support tools: Most insurance providers require you to work with an agent or broker to get details about cost and plan options. But some companies have online tools and platforms that allow you to get quotes and view your options on your own.
Networks: Insurance providers offer plans with different network types. Depending on the provider, you may be able to provide your workers with the following options:
- Exclusive Provider Organization (EPO): EPOs are managed care plans that only cover services if you visit healthcare providers and hospitals within the network.
- Health Maintenance Organization (HMO): With an HMO, you’re limited to care within the network, and you must get a referral to visit a specialist. HMOs tend to be the lowest-cost option.
- Point of Service (POS): POS plans are less expensive if you use in-network providers, but you need a referral to visit a specialist.
- Preferred Provider Organization (PPO): PPOs are often more expensive, but they give covered persons more flexibility. In-network providers are less expensive, but you can visit out-of-network providers, and you can see a specialist without a referral.
There’s a lot to consider when it comes to business insurance, not just health insurance for your business. Our comprehensive guide breaks down the types of insurance options — from BOP’s to general liability and others — to help you understand which policy watches your needs. We have also compiled the best insurance companies for small businesses. If you operate a jewelry retail business, you may want to consider Jewelers Mutual’s business insurance specifically designed for jewelers.
Frequently asked questions
Do I have to provide health insurance to my employees?
You only have to provide health insurance to your employees if you have 50 or more full-time workers. Those with fewer than 50 employees aren’t legally required to offer coverage, but you may be eligible for valuable tax benefits if you do.
What are the penalties for not offering health benefits?
Employers with 50 employees or more that don’t offer coverage that meets minimum value and affordability standards may incur penalties. Depending on what coverage you offer, the penalty ranges from $247.50 to $371.67 per month, per full-time employee.
What do entrepreneurs do for health insurance?
If you don’t have any employees, you won’t qualify for group plans from small business insurance providers. However, you may be eligible for an individual health insurance plan through Healthcare.gov or your state health insurance marketplace.
Our methodology
We evaluated seven leading providers and marketplaces of small business health insurance. To make our selections, we evaluated each company on the following criteria:
- Availability: Preference was given to companies operating in the majority of states.
- Employee minimums: We looked for companies with low employee minimums, offering coverage to businesses with just one or two employees.
- Product options: We focused on companies with multiple insurance plans, including multiple network options and tiers of coverage.
- Customer satisfaction: Priority was given to companies with high ratings from the National Committee for Quality Assurance Ratings.
