The Affordable Care Act (ACA) changed how businesses offer health insurance. If you have 50 or more full-time employees, you must offer "affordable" health insurance to them. This means they can’t spend more than 9.5% of their household income for coverage. Otherwise, you may have to pay a penalty—called the "shared responsibility payment"—to the IRS.
Even with fewer than 50 employees, there are still plenty of reasons to make health insurance an option. These may include tax incentives, recruiting, employee retention, and healthier employees. It's not easy, though, to find the right insurance plan to keep your small business and all of your employees healthy and thriving.
To help focus the long list of choices, we compared 15 of the best health insurance options for small businesses. In addition to our survey of pricing structures, available benefits, and quality of networks, our criteria also included ratings from the National Committee for Quality Assurance (NCQA), J.D. Power’s 2020 U.S. Commercial Member Health Plan Study, and AM Best. The six leaders in all of these categories are reviewed here to help you choose the best carrier for your small business.
The 6 Best Health Insurance Providers for Small Business Owners of 2021
Blue Cross Blue Shield (BCBS) wins our best overall because it is one of the largest provider networks across the country, with strong customer service ratings and numerous plan offerings.
Expansive provider network
Data-driven healthcare solutions
Limited health plan details on BCBS website
Must contact a sales representative
Mixed reviews on ConsumerAffairs
Blue Cross Blue Shield is a nationwide association of 36 independent insurance companies. The association has been around since 1929 and most of its companies have received high ratings from AM Best. The companies earned ratings of 2.5 to 4.5 out of 5 from NCQA. BCBS companies also ranked high on the J.D. Power 2020 U.S. Commercial Member Health Plan Study.
BCBS provides coverage in every zip code in all 50 states, plus the District of Columbia and Puerto Rico. The company also underwrites international coverage in 170 countries through BCBS Global. BCBS has a network containing over 96% of the country’s hospitals and 95% of the country's doctors. The company’s large network seeds the data for innovative healthcare solutions—like the ability to compare costs for over 1,600 procedures—more than any other insurer.
BCBS is a popular solution, covering seven million people who work for small employers. BlueCard® PPO is a leading PPO network, working with 96% of U.S. hospitals and 95% of U.S. physicians. The details of each health insurance plan vary depending on which company you work with, but you can type in your zip code or state for the phone number of a local sales representative who can give you information specific to your locality.
UnitedHealthcare as part of UnitedHealth Group, is the largest company on our list, covering more than 45 million individuals through 6,500 facilities and more than 1.3 million providers in its network. The company’s big annual investment in technology is a standout feature, which will only expand the company’s best-in-our-review network over time.
Innovative healthcare technology
Expansive provider network
Easy to compare plans online
Past issues with mental health coverage
Mixed ratings on ConsumerAffairs
UnitedHealthcare has been in business since 1977 and has an A rating from AM Best. It scored from 2.5 to 4.5 on a scale of 1 to 5 from NCQA. As large as it is, the company didn’t rank high in the J.D. Power 2020 U.S. Commercial Member Health Plan Study, however.
One thing to be aware of: UnitedHealthcare has a troubled reputation for its mental health coverage. In March 2019, a federal judge ruled the company discriminated against patients for mental health and substance abuse treatment. Since then, the company has taken steps to expand mental healthcare by acquiring AbleTo, a virtual behavioral healthcare startup.
UnitedHealth Group spends nearly $3.5 billion every year on technology and innovation—and it shows. The company’s small business programs have a number of unique tools. Members can use Virtual Visits to meet with a doctor and get a prescription. Another robust feature is the COVID Symptom Checker, which uses artificial intelligence to give basic medical advice.
UnitedHealth Group is situated in all 50 states and has international operations as well. The company works with 125,000 employers, 1.3 million healthcare professionals, and 5,600 hospitals.
If your small business has between four and 50 employees, you can compare plans online. Work with the UnitedHealthcare’s Virtual Assistant for a tailored recommendation or you can call a local sales representative. Every state maintains different plan options with a variety of costs, but you can customize your company’s plan with UnitedHealthcare's Dual-Option, which allows you to combine plans without paying more.
Humana earned the top spot on our list for providing the best customer service because the company’s strong reputation is widely recognized. Humana stands out with high marks from Newsweek’s America’s Best Customer Service Report and J.D. Power’s 2020 U.S. Commercial Member Health Plan Study.
Strong customer service
Large provider network
Plan details on website
Not available in all states
Humana is one of the nation’s largest insurance companies and offers group medical coverage in 18 states. The company began in 1961 has been doing insurance since 1984 and has earned an A- rating from AM Best. Humana received 2.5 to 4.0 ratings on a scale of 1 to 5 from NCQA. The company ranked high in J.D. Power’s 2020 U.S. Commercial Member Health Plan Study.
Humana has been number one in health insurance customer service for two years, according to Newsweek’s America’s Best Customer Service report. The company works with millions of medical and specialty partners throughout most of the country. Humana’s network is 350,000 medical providers and over 3,000 hospitals.
Humana has five plans for businesses:
- Canopy: All business sizes
- Efficiency: All business sizes (lower premiums)
- Simplicity: All business sizes
- HDHP: All business sizes (high-deductible health plan)
- Copay: All business sizes (copays and deductible)
Depending on where you live, the cost of these plans may vary. The company also has a level-funded premium cost-saving option for small businesses with up to 100 employees. You can learn more online or call a representative for details.
Aetna ranks highest in this review for its health expense fund options, especially as more small businesses choose high-deductible health plans. These health expense funds may offer employees tax-friendly savings opportunities to combat rising out-of-pocket healthcare costs.
Health expense fund options
Large provider network
High levels of customer satisfaction
Not available in every state
Aetna is an insurance company with a long history in the business. The company has been around since 1853 and has earned an A rating with AM Best. Aetna scores from 3 to 4 on a scale of 1 to 5 with NCQA. The company also ranks high on the J.D. Power 2020 U.S. Commercial Member Health Plan Study.
Aetna isn’t available in every state but the company has a large global footprint, with 700,000 primary care doctors and 5,700 hospitals. Depending on your state, the company may have one, two, or all three of these plans as well as others — the costs may vary:
- Open Choice Plan: Visit any healthcare provider
- Traditional Choice Health Insurance Plan: Visit any licensed provider, may need a referral for some services
- Aetna HealthFund One-to-One: Pick a high-deductible health plan and pair it with a health reimbursement arrangement (HRA) or health savings account (HSA)
Four health expense fund options for small businesses are unique to Humana. These give employees tax-advantaged savings opportunities:
- HealthFund Health Reimbursement Arrangement
- HealthFund Health Savings Account
- HealthFund Flexible Spending Account
- Retirement Reimbursement Arrangement
Health expense funds give policyholders the chance to save money before taxes for future medical expenses. You may lower your taxable income by making contributions, which puts more money in your and your employees' pockets.
Kaiser Permanente is unmatched on preventative care in our review. The company's emphasis on prevention has led to high cancer screening rates for its members—catching the disease earlier and making a difference in survival rates.
Strong emphasis on preventative care
Detailed plan information on website
Only available in eight states plus Washington DC
Slow mental healthcare treatment
Kaiser Permanente is a leading healthcare provider and nonprofit health plan. The company was founded in 1945 but doesn’t currently have a rating with AM Best. It gets 3.5 to 5 ratings on a scale of 1 to 5 from NCQA. Kaiser ranked high on the J.D. Power 2020 U.S. Commercial Member Health Plan Study.
Kaiser Permanente’s coverage isn’t perfect, though. As California's largest insurer, the company has faced a number of state sanctions and fines for delaying mental healthcare to members. The Los Angeles Times reported in December of 2019 that many people were still struggling to get timely care.
Kaiser offers coverage in California, Colorado, Georgia, Hawaii, Maryland, Oregon, Virginia, Washington, and Washington, DC. The company has 12.4 million members and a network of 23,271 doctors and 63,306 nurses.
Kaiser has a reputation for high-quality healthcare—with a strong emphasis on preventative care. The company’s electronic records system sends reminders for screenings and offers real-time coordination between providers. As a result, Kaiser has cancer screening rates above the national average. The company also leads the nation in keeping high blood pressure down.
Kaiser’s small business insurance plans focus on companies with two to 100 employees. There is a total of six plan options, with varying costs by state:
- Traditional HMO plans
- Deductible HMO plans
- HSA-Qualified Deductible HMO plans
- Deductible HMO with HRA plans
- Point of Service (POS) plans
- PPO plan
These plans offer four categories of coverage—bronze, silver, gold, and platinum—which have a variety of deductibles, copayments, and coinsurance options. You can compare plans through Kaiser’s website or call a local sales representative.
Cigna is known as a global health services provider and employs more than 70,000 people in 30 countries. Cigna also is our top choice for overall plan options thanks to its hefty selection of insurance programs for small businesses in 10 states.
Range of plan options
Large provider network
Limited plan details online
Low ratings on ConsumerAffairs
Founded in 1792, Cigna has earned an A rating with AM Best. Cigna received 2.5 to 4 ratings on a scale of 1 to 5 from NCQA. The company received some bad and some good ratings in the J.D. Power 2020 U.S. Commercial Member Health Plan Study depending on the region.
Cigna is a global company with 180 million customer and patient relationships in more than 30 countries. The company’s network includes 1.5 million relationships with providers, clinics, and facilities. It is licensed to underwrite health insurance plans in Arizona, Colorado, Florida, Illinois, Kansas, Missouri, North Carolina, Tennessee, Utah, and Virginia.
Cigna offers small business health insurance in these states for companies with more than 50 employees. Administrative services for self-funded plans with as few as 25 employees are also available.
Cigna offers the following group health insurance plans:
- Open Access Plus (OAP): Nationwide network with discounts
- Cigna SureFit: Customizable plans in select areas
- Indemnity Plans: Network savings plans with no referrals needed
- HMO: Quality, affordable providers in local areas
- LocalPlus: Focused, limited network of affordable providers
- Network: Quality, affordable providers in local areas
- PPO: A large, national network similar to OAP, but offers more choice with flexibility for out-of-network care.
- Cigna Group Medicare Plans: Health care coverage options designed to meet the changing needs of your retired employees and your organization.
The costs vary depending on where you live. You will have to speak with a local representative for complete plan details.
Are Businesses Required to Offer Health Insurance?
You must provide health insurance if you have 50 or more full-time employees. If you have fewer than 50 employees, you may be exempt from this federal rule. But some states—like Hawaii, for example—may have stricter requirements where you must offer health insurance regardless of business size. You need to be familiar with both the state and federal guidelines for small business health insurance.
Can Business Owners Buy a Plan on the Marketplace?
As a small business owner, you have two health insurance options through Healthcare.gov, a.k.a. The Marketplace. If you are a sole proprietor, you may purchase an individual health insurance plan. Your options may include bronze, silver, or gold plans with a range of monthly premiums, deductibles, and coverage.
You may also qualify for the Small Business Health Options Program (SHOP) if you have one to 50 full-time employees. If your company has fewer than 25 full-time employees making an average of $50,000 or less, you may be eligible for the Small Business Health Care Tax Credit which credits 50% of all premiums paid on company tax returns.
How Much Does Health Insurance Cost a Small Business?
The cost of small business health insurance depends on several factors. These may include the location of your company, number of employees, coverage details, deductibles, and more. The average annual premiums are $6,412 for individuals and $18,980 for family coverage, according to a 2019 survey from the Kaiser Family Foundation.
How We Chose the Health Insurance Companies
Picking the best health insurance for your small business isn’t easy. To craft our list, we looked for established health insurance companies with a solid reputation. We also compared each company’s coverage options, nationwide availability, network, and stand-out features.
IRS. "Questions and Answers on Employer Shared Responsibility Provisions Under the Affordable Care Act." Accessed January 1, 2021.
AM Best. “AM Best Affirms Credit Ratings of Anthem, Inc. and Its Subsidiaries.” Accessed January 4, 2021.
NCQA. "NCQA Health Insurance Plan Ratings 2019-2020 - Summary Report." Accessed January 1, 2021.
J.D. Power. “Health Plans Have a Customer Engagement Problem, J.D. Power Finds.” Accessed January 1, 2021.
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AM Best. "AM Best Affirms Credit Ratings of UnitedHealth Group and Most Subsidiaries; Upgrades Credit Ratings of Certain Subsidiaries." Accessed January 4, 2020.
The New York Times. “Mental Health Treatment Denied to Customers by Giant Insurer’s Policies Judge Rules.” Accessed on January 1, 2021.
Humana. “Humana Is No. 1 in Customer Service Among Health Insurance Companies, as Ranked by Newsweek.” Accessed January 1, 2021.
AM Best. "AM Best Affirms Credit Ratings of Humana Inc. and Majority of Its Health Subsidiaries; Maintains Positive Outlook." Accessed January 1, 2021.
AM Best. “AM Best Affirms Credit Ratings of CVS Health Corporation’s Aetna Subsidiaries.” Accessed January 1, 2021.
Los Angeles Times. "Kaiser touts mental health gains, but patients still struggle to get timely treatment." Accessed January 1, 2021.
AM Best. “AM Best Assigns Credit Ratings to CIGNA Global Insurance Company Limited." Accessed January 1, 2021.
Kaiser Family Foundation. "Employer Health Benefits." Accessed January 1, 2021.