A Guide to Health Insurance Options for Small Businesses
In my experience, health insurance isn’t always at the top of the “to-do” list for new business owners. This is often because they have a side hustle or access to health insurance through a partner or another job. However, by the first or second year in business, many business owners start to wonder about the best health insurance options for small businesses.
Navigating health insurance options for small businesses as a business owner can seem overwhelming, but it’s a pretty simple process once you walk through it. Below, we’ll explore how to understand and choose small business health insurance options, review average costs, and prepare for 2025 with the coverage you need. Plus, we’ll discuss whether health insurance can be considered a business expense.
Key Dates for Health Insurance Enrollment
Open enrollment for individual health insurance plans runs through January 15, 2025. If you want coverage to start on January 1, make sure to enroll by December 15. Otherwise, you have until January 15 to secure coverage beginning February 1. Additionally, you may qualify for enrollment outside of these dates if you experience a qualifying life event such as marriage, the birth of a child, or losing coverage.
Understanding Your Small Business Health Insurance Options
Step 1: Choose Your Ideal Coverage
Before exploring plans, take time to anticipate the type of coverage you’ll need in 2025. You might want a comprehensive plan if you have chronic health conditions or need regular medical care. If you’re generally healthy and don’t expect many medical visits, a less extensive plan might be just what you need. Either way, protecting your health can help protect your business and a health insurance plan is a part of that.
Consider these questions when you think about your health insurance needs as a business owner:
- How often do I visit the doctor each year?
- Do I need coverage for prescriptions?
- Are there specialists I need to ensure are in-network?
- Am I expecting any specific procedures or tests (e.g., surgery, mammograms, etc.)?
Something else you want to make you consider is dental and vision coverage. Feeling overwhelmed? No fear! Consider working with a licensed insurance agent for guidance (more on that, below).
Step 2: Explore Individual Plans
One of the easiest ways to find health insurance options for business owners is to work with a licensed health insurance agent (for free) through healthcare.gov. Like all insurance agents, their services are free to the consumer and they are trained to help you navigate the Affordable Care Act (ACA) marketplace, which guarantees coverage for all Americans. To find a free agent, go to https://www.healthcare.gov/find-assistance/.
I found it more helpful to work with an agent rather than navigating the website on my own, but you can choose whichever approach works best for you!
Additional Plan Details
Plans through the ACA start as low as $10 per month, with costs based on household income. Approximately 80% of enrollees qualify for reduced premiums. Working with an agent can save time and provide peace of mind. I’ve worked with a local agent twice, dedicating about an hour to reviewing options and another hour to selecting a plan and enrolling. The process was efficient and much easier than navigating the system on my own.
Step 3: Consider Medicaid if Needed
If you can’t afford an individual plan, Medicaid might be a better option for you! This public insurance program, funded by federal and state governments, is available to those whose income falls within specific limits. My home state of North Carolina qualifies adults earning up to 138% of the federal poverty line. This can be a great option to explore in the early stages of operating your business.
Remember, you pay for this benefit as a taxpayer! Each state has a slightly different application process for finding out your eligibility. To check eligibility in your state, search online for “How to get Medicaid in [state name].” For example, “How to get Medicaid in North Carolina.”
Tax Benefits: Deducting Health Insurance Premiums
As a small business owner, you may be eligible to deduct your health insurance premiums as a business expense. Your CPA can provide detailed guidance, but in most cases, premiums are deducted from your income. Additionally, other healthcare-related expenses might qualify for deductions. To make the process smoother, keep detailed and organized records of all healthcare expenses to share with your CPA during tax season.
The Bottom Line
Choosing the right health insurance options for small businesses doesn’t have to be complicated. Whether you opt for an individual plan, qualify for Medicaid, or explore other small business health insurance options, having coverage provides peace of mind and financial security. Take the time to explore your choices, consult with professionals when needed, and set yourself up for success in 2025 and beyond.
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