Health insurance for a business with people on payroll

The short answer: a business with 1 to 50 employees has four ways to handle health insurance, and the right one depends on three facts: how many people are on payroll, what they earn, and where they live. A group plan buys one plan for everyone in the small-group market; an ICHRA reimburses each employee for a plan they pick on the individual market; a QSEHRA does the same with a cap ($6,450 single / $13,100 family in 2026) for employers under 50 with no group plan; and nothing formal, where employees use the marketplace credit themselves and the owner buys privately. The owner’s own coverage is a fifth question with its own rules by entity type.

Every page here is built from public files: the CMS 2027 plan filings that price an ICHRA allowance county by county (the median Silver at 40 runs from $604 a month in Iowa to $1,254 in West Virginia across the 24 HealthCare.gov states on this site), the IRS rules for the credit and the owner, and BLS pay data for 30 kinds of business. The ZIP box on every page goes to a licensed agent who compares all four routes for your business, free; the premium is the same whether you use an agent or not.

Start where your business starts

The guides

• Group plan, ICHRA or QSEHRA: which fits a small business — The three ways a business with 1 to 50 employees offers health coverage, side by side: who can offer each, what it costs the employer, what employees get, and the facts about your team that decide it.
• ICHRA for a small business — How an Individual Coverage HRA works for an employer with 1 to 50 staff: the allowance, employee classes, the 2027 affordability test, who cannot take it, and what it buys in your county.
• QSEHRA for a small business — The Qualified Small Employer HRA: under 50 full-time equivalents, no group plan, a cap of $6,450 single / $13,100 family (2026), reimbursements that reduce the employee's marketplace credit dollar for dollar.
• The small business health care tax credit — Up to 50% of the employer's premium share for two years: fewer than 25 full-time equivalents, average wages under the limit ($67,000 for 2025), a SHOP plan, and a uniform contribution. How the phase-out works and who actually gets it.
• The owner’s own coverage, by entity type — A small business owner's personal coverage follows the tax entity: Schedule C deduction for sole proprietors and disregarded LLCs, Box 1 for S-corp owners, guaranteed payments for partners, and no HRA for any of them.
• 1099 contractors on your team — Only W-2 employees can be covered by a group plan, an ICHRA or a QSEHRA. What a business can and cannot do for its 1099 contractors, the misclassification risk, and where to send them.
• Part-time and seasonal staff — How part-timers and seasonal workers count toward full-time equivalents, the 50-FTE employer mandate line, group plan eligibility at 30 hours, and what to offer the staff a group plan leaves out.
• What small business health insurance costs — Round numbers for 2027: the KFF employer averages, what an employer share looks like, what an ICHRA allowance buys on the individual market in 24 states, and why the county decides more than the state.
• Renewal season for a small business plan — The annual renewal letter is a decision, not a bill: the five checks a small employer makes each autumn, when switching structures makes sense, and the dates that matter for 2027.
• Just the owner, no employees — A one-person business has no group to insure and no one to offer an HRA to. Where the owner buys, the deduction and credit that apply, and when hiring the first employee changes the answer.

Who runs this

Plans For Small Business is one of five reference sites run by Health Advisory, the agency of Daniel Griffin, a licensed independent health insurance agent (NPN 22052447) in Valrico, Florida. Coverage by County holds every marketplace plan by county, Plans By State compares states, Plans By City reads the insurers’ hospital files, Plans For 1099 covers the self-employed with no staff. This one is for the owner with people on payroll. About · How the numbers are checked.