Health insurance for small businesses

Health coverage is a major decision for small businesses. When looking for a plan that fits the needs of your business and employees, you should carefully consider things like the cost to you and your employees, and the health services covered.

For a basic guide on some health insurance products and services that may be available to small businesses, check out these resources. You can also contact a licensed agent or broker for more help.

Small Business Health Options Program (SHOP)

SHOP is for small employers (generally those with 1-50 employees), who want to provide health and/or dental insurance to their employees. Purchasing insurance through SHOP gives employers choice and flexibility in offering their employees a quality health plan.

Enrolling in a SHOP plan is generally the only way for an eligible small employer, including non-profits, to claim the Small Business Health Care Tax Credit.

Qualified Small Employer Health Reimbursement Arrangement (QSEHRA)

Small employers who don’t offer group health coverage to their employees can help employees pay for medical expenses, including premiums for Individual Marketplace coverage, through a Qualified Small Employer Health Reimbursement Arrangement (QSEHRA).

Tax-favored health plans

There are various health plans that are designed to give individuals tax advantages to offset health care costs. These include: Health Savings Accounts (HSAs), Health Flexible Spending Arrangements (FSAs) and Health Reimbursement Arrangements (HRAs).

For more details on tax-favored health plans refer to the IRS.

Association health plans

An association health plan allows small businesses, and certain self-employed workers, to band together by location or industry to obtain health coverage as if they were one large employer.

Visit the Department of Labor website for additional information on association health plans.

Short-term health insurance

Short-term, limited-duration insurance is a type of health insurance coverage in the individual market that was primarily designed to fill gaps in coverage that may occur when an individual is transitioning from one plan or coverage to another plan or coverage, such as in between jobs.

These products are not considered Marketplace coverage and they may not be available in all states. They may cover different benefits than Marketplace plans and you won’t be able to qualify for premium tax credits.

Learn more about new rules for short-term health plans.