You are trying to keep good people and you cannot compete with a corporate benefits package on price alone. The good news is that you do not have to. Small employers have three legitimate structures available and most owners have only ever been pitched one of them.
Small group coverage generally has open enrollment windows set by the carrier and the state, and some structures allow enrollment year round. Individual coverage arrangements can start the first of any month.
This is the exact sequence we run. No portal maze, no call-center roulette, no quote and vanish.
Full time equivalents, not headcount. Part timers, seasonal workers and 1099 contractors are treated differently, and the count determines which structures are even available to you.
Retention, recruiting, owner coverage, or a genuine benefit for everyone. These lead to different plans. An owner buying coverage for themselves and two employees has different math than a shop trying to win against a national competitor for skilled labor.
Traditional small group, level funded, and reimbursing employees for individual coverage. Each has real advantages and real drawbacks depending on your headcount and your workforce health profile.
The best plan fails if nobody understands it. We run the enrollment meeting, answer the questions, and handle the paperwork so it does not land on your desk or your office manager.
This is the question every owner with a handful of employees asks, and the answer is genuinely not always the group plan. Here is what actually separates the two routes.
| What differs | Group plan through the business | Everyone buys individually |
|---|---|---|
| Who can be covered | Guaranteed issue for eligible employees. Health history is not used to decline anyone. | Depends on the route. Marketplace coverage is guaranteed issue; private medically underwritten policies are not. |
| Participation requirements | Carriers typically require a minimum share of eligible employees to enroll, which can be hard to hit with a small headcount. | None. Each person decides independently and nobody else’s choice affects them. |
| Who pays | The employer normally must contribute a minimum percentage of the employee premium. | The individual pays, and may qualify for a premium tax credit if household income allows. |
| Premium tax credits | Employees offered affordable group coverage are generally ineligible for a marketplace subsidy. | Available, subject to income. This is the row that most often decides the answer. |
| Enrollment timing | Group plans have their own effective dates and are not tied to the individual open enrollment window. | Marketplace enrollment is November 1 to January 15, or a qualifying life event. Private underwritten policies can be applied for year round. |
| Administration | Ongoing: eligibility, onboarding, offboarding, renewals. | None for the business. |
| When each one usually wins | A group plan tends to win when someone on the team has a condition that makes individual underwriting hard, or when the business wants coverage as a genuine recruiting tool. | Individual coverage tends to win when most of the team would qualify for meaningful premium tax credits, because an offer of affordable group coverage generally takes those credits away. |
This table describes how coverage generally works. It is not a quote, it is not specific to any one insurer, and benefits vary by policy and by state. Confirm the details against the actual plan documents before you enroll.
The enhanced premium tax credits expired going into 2026. These are the four numbers that describe what followed, and they apply whatever line of work you are in.
Offering affordable group coverage generally makes those employees ineligible for a marketplace premium tax credit. For a business whose team would mostly qualify for substantial credits, a well-intentioned group plan can leave people worse off than doing nothing. For a team earning above the cliff, where no credit was available anyway, that objection disappears entirely and the group plan often looks much stronger.
So the honest first question is not “what does a group plan cost.” It is “where does my team’s household income actually sit?” Above 400% of the federal poverty level — $62,600 for one person, $128,600 for a family of four for 2026 coverage — there is no credit to lose.[4]
The expiration of the enhanced premium tax credits pushed the average premium actually paid up 58%, from $113 to $178 a month, and the average deductible up 37%, from $2,759 to $3,786.[1] Households above the subsidy cliff made up about 7% of 2025 enrollment but nearly 48% of the decline.[1] If your employees sit in that band, the value of a group offer went up sharply this year.
Most small business owners have been pitched exactly one thing, traditional small group coverage, and they either bought it or decided benefits were out of reach. There are two other legitimate paths. Level funded plans let a healthier than average workforce keep some of the savings rather than handing them to the pool, with stop loss protection so a bad year does not become a catastrophe. Individual coverage arrangements let you give employees a defined, tax advantaged amount to spend on their own plan, which caps your cost and lets each person choose the network that fits their family.
Which one wins depends on things you already know. How many employees. How healthy the group skews. Whether your people live in one metro or spread across three states. Whether you want a predictable line item or you are willing to take some variability in exchange for upside. That is a thirty minute conversation, not a form.
One call. Licensed producer, not a call center. If your current plan is still the better deal, I will tell you that.
In a lot of small businesses the owner is the person with the most at stake, and the owner is often the one who could be covered far more efficiently on a separate track. There is nothing improper about pricing owner coverage and employee coverage as two questions. It frequently produces a better answer for everyone than forcing one plan to serve both.
The most common failure is not price, it is renewal. A group gets quoted attractively in year one and takes a hard increase in year two, and by then switching is disruptive. Ask what the plan looks like at renewal before you sign, not after. The second most common failure is a network that looks fine on paper and does not include the hospital your people actually drive to.
We ask for a census, roughly what you want to spend, and what problem you are trying to solve. Then we price all three structures and show you the comparison including the renewal risk on each. If your best answer is to reimburse employees rather than sponsor a plan, we will tell you that even though it is the smaller sale.
Figures on this page last verified against the primary sources on August 13, 2026
Scotty Jaymes Insurance is a private, independent insurance agency. We are not affiliated with, endorsed by, or connected to any government agency, the federal Medicare or Medicaid programs, or any state or federal health insurance marketplace including Healthcare.gov. The market data above is published by the organisations cited and is provided for context only. It does not describe the pricing, benefits or availability of any policy we offer. Plan availability, benefits and pricing vary by state and by applicant. Nothing here is tax advice.
Requirements vary by state and carrier, but many small group markets start at two enrolling employees. Participation minimums also apply, meaning a certain share of eligible employees must enroll for the group to be issued.
Generally you must offer coverage to all similarly situated eligible employees, though you can define classes such as full time versus part time. You cannot pick and choose individuals.
A structure where the employer pays a fixed monthly amount that covers expected claims, administration and stop loss insurance. If claims come in lower than expected, the employer may receive a portion back. If they run high, stop loss coverage limits the exposure.
There are tax advantaged arrangements that let employers reimburse employees for individual coverage instead of sponsoring a group plan. Rules on classes, notice and integration are specific, so this needs to be set up correctly.
Employers below the applicable large employer threshold generally are not required to offer coverage. Many do anyway because it is one of the few benefits that moves the needle on retention for skilled workers.
Under-65 coverage only. We do not sell Medicare.