How does small business health insurance work?

As a small business owner, you’ve learned to take your time with decisions that impact your bottom line, and to look for solutions that make the most sense for you and your employees.

Researching, comparing and buying health insurance is no small task but the benefits are undeniable. Offering insurance coverage can improve employee satisfaction and retention, and help you attract top candidates when recruiting new talent.

Learn the basics of small business health coverage

Just getting started with your research? Here are the most important things to know about choosing a small business health insurance plan.

  • You can buy business coverage any time.
  • There’s no special enrollment period for business health insurance.
  • You can request a quote online and from as many companies as you like. There’s no need to make contact or provide any more information than you’re willing to share until you’re ready to talk.
  • Finally, it’s easy to compare plans online. Most business health insurance providers offer interactive tools and calculators to help you compare the plans they offer.

Interested in comparing UnitedHealthcare plans and costs?

Get a quote and compare plans in less than 10 minutes1 with our easy online assistant. 

Use your ZIP code to find coverage

The first thing to know is that small business coverage options vary depending on the state in which you do business and the insurance providers that offer plans in your state. If you have 50 employees or fewer, and want to find out how much insurance will cost, our small business website is a great place to start. Provide your ZIP code, the number of employees you'll cover, and if you'd like to contribute to their insurance premiums.

If you employ more than 50 people on a full-time basis, you'll need a different kind of plan.

Know the laws for small business coverage

The laws for small business health insurance are based on the number of full-time workers you employ. If you have at least one full-time employee (other than your spouse) on your payroll, you are eligible to purchase business health insurance.

You don’t have to purchase coverage unless you employ more than 50 people full-time. Once you reach 51 or more full-time employees, including yourself, you are required to offer health care coverage to full-time employees.


Decide who will be offered coverage through work

You can offer health insurance to all or just some of your employees, based on their employment status (full- or part-time), how they are paid (hourly or salary) and other factors like tenure or seniority. These “bona fide employee classifications” are recognized under employment law. You cannot discriminate against any individual or group of employees based on age, race, religion or sex. Your attorney can help you understand the legal guidelines associated with offering coverage to some, but not all, of your employees.

Small Business Health Options Program (SHOP)

If you employ fewer than 25 full-time employees, and their collective average annual salary is $50,000 or less, you may be able to participate in your state’s Small Business Health Options Program (SHOP). Each state has its own SHOP rules and guidelines, but in all states with a SHOP option, you must offer coverage to all full-time employees and pay at least half of their insurance premiums to qualify for coverage under SHOP.

Working with a broker

If you’re like most business owners, time is your most important and least available resource. A health insurance broker can do most of the leg work for you, allowing you to evaluate more plans in less time. Brokers are typically paid on commission (be sure to ask about their fee structure up front), so this option won’t cost you anything extra, and may be the most efficient.

Take the next step toward getting coverage for your business

Employer-sponsored health insurance is one of the most sought-after benefits you can offer to employees. Find a plan that will work hard for them, and makes sense for you.


  1. Cost estimates may not be immediately available for all states.