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If you own a small business and are looking to attract—and keep—employees, providing health insurance to your workers may help. A 2018 survey conducted by American Health Insurance Plans found 56% of participants said receiving health insurance benefits impacted their decision to stay at their current job.
“This is particularly true if your employees are highly skilled, earn good salaries and can easily find jobs that offer benefits—you’ll want to offer good health benefits to attract these workers,” says Bruce Jugan, president of BenefitsCafe.com, an insurance broker in Montebello, California.
Since the health insurance marketplace is vast, we did the initial research for you and ranked the best health insurance providers for small business owners. Read on to see which companies made our list.
To determine the best health insurance providers for small business owners of 2021, the Forbes Health editorial team evaluated U.S. insurance companies that offer plans nationwide by the benefits they offer, the sizes of their provider and hospital networks, how easy it is to enroll in the plans and their reputations among agencies like A.M. Best and FitchRatings (which evaluates a company’s financial health).
1.3 million
A-
AA-
1.3 million
A-
AA-
UnitedHealthcare offers an array of competitive health insurance plans for businesses with just two to 50 employees, making it a great option for small business owners. Plans vary by location and business size, but include options like tiered benefit plans, primary care-centered plans, defined contribution plans and consumer-driven health plans (like health savings accounts and health reimbursements accounts). While coverage varies by plan, many of UnitedHealthcare’s small business health insurance plans include vision, dental and prescription drug coverage, and even out-of-network benefits. With a solid reputation rating among credit rating agencies like Fitch and A.M. Best, UnitedHealthcare claims our top spot for small business health insurance.
1.7 million
A
A+
1.7 million
A
A+
Blue Cross Blue Shield’s small business health insurance offerings vary by state. In California, for example, the company offers two packages for small businesses: the Off Exchange Package, which features 60 plans for small businesses including PPO, HDHP and HMO options, and the Mirror Package, which features seven plan options that are purchased through a broker or directly from Blue Shield California or Covered California for Small Business. Its variety of plan offerings, robust network of doctors and hospitals and high ratings among credit rating agencies make the Blue Cross Blue Shield network one of our top picks for small business health insurance.
1.2 million
A
BBB+
1.2 million
A
BBB+
Aetna offers health insurance plans for businesses as small as two employees, with an array of benefits ranging from behavioral health coverage to pharmacy programs. One option worth exploring includes the Aetna Funding Advantage health plan, which is a self-funding option built specifically for small businesses. It offers 50% of any surplus returned to you at the end of the year if you renew your plan, monthly payments based on health trends of your employees, stop loss coverage and more.
Company | Company - Logo | Forbes Advisor Rating | Forbes Advisor Rating | NUMBER OF PROVIDERS IN NETWORK | A.M. Best rating | Fitch rating | Learn More CTA text | Learn more CTA below text | VIEW MORE |
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UnitedHealthcare | 5.0 | 1.3 million | A- | AA- | View More | ||||
Blue Cross Blue Shield | 4.0 | 1.7 million | A | A+ | View More | ||||
Aetna | 3.5 | 1.2 million | A | BBB+ | View More |
The Affordable Care Act (ACA) defines a small business as a group of no more than 50 full-time employees (FTE), though some states define it differently. California, for instance, categorizes small businesses as employers of no more than 100 FTE. Small business owners aren’t legally required to provide health insurance to their workers, but there are rules for those who do.
A small business owner enrolls in a group health insurance plan offered by a private insurance company and then offers their employees the opportunity to enroll in that plan. The employer pays part of their employees’ monthly premiums, and the employees are typically responsible for their deductibles, copays and services not covered by the plan.
Thanks to the ACA, small business owners can buy health insurance for their employees through approved insurance companies with the Small Business Health Options Program (SHOP). Getting insurance through the SHOP Marketplace allows employers to offer health plans from multiple insurance companies and qualifies them for the Small Business Health Care Tax Credit, which can help with the cost of providing coverage.
Small business owners can also work with an insurance broker who conducts all plan research and comparisons to find the best plan for your business at no additional charge.
Group plans for small businesses are organized by “metal” tiers: bronze, silver, gold and platinum. Each tier features different premiums, deductibles, copays and out-of-pocket limits, catering to people who prefer to pay higher monthly premiums for more extensive coverage and those who’d rather pay a lower monthly premium and risk higher coverage costs in the event that they need to seek care. Employers have flexibility in which type of plans they choose to offer their employees.
Small business owners do not have to provide health insurance benefits to employees. Should they choose to do so, they must meet certain requirements set by the ACA below. These requirements can vary by state.
In addition to these rules, states typically require a minimum percentage of employee participation in health insurance plans offered by small businesses, says Jugan. “The reason behind this [rule] is if there are 10 employees in a company and only three enroll, it’s likely that those three are really sick.” To better distribute the costs, total enrollment should be a mix of individuals with varying health statuses.
The cost of offering health insurance for a small business owner depends on the plan choice and how much the employer wants to pay. “The average cost for small business owners is $400 to $500 per employee per month,” says Jugan. “If the business has a lot of older employees, then it might cost more,” he adds.
You have several options when it comes to searching for the right plan options for your small business:
To determine the best insurance providers for small business owners of 2021, the Forbes Health editorial team evaluated insurance companies that offer plans nationwide in terms of:
Small business owners are not required by law to provide their employees with health insurance. With that said, make sure you understand how your state defines a small business, as it will impact what you are required to provide, should you decide to offer health insurance to your employees.
The small business owner decides how much coverage to offer employees. The average cost for small business owners is $400 to $500 per employee per month, depending on the ages of the employees, says Jugan.
The ACA established that businesses with at least 50 employees must provide some level of health insurance. If they don’t, they have to pay penalties.