The 6 Best Health Insurance Providers for Small Business Owners of 2020

Keep your employees healthy with these insurance plans

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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 2020

Best Overall: Blue Cross Blue Shield

Blue Cross Blue Shield

Blue Cross Blue Shield

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.

Pros
  • Expansive provider network

  • Data-driven healthcare solutions

Cons
  • 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 91 years of experience and most of its companies have received high ratings from AM Best. The companies earned ratings of 3 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 partners with over 90% of the country’s doctors and hospitals with a network of 342,000 providers nationwide. 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.

Best Network: UnitedHealthcare

UnitedHealthcare

 UnitedHealthcare

UnitedHealthcare is the largest company on our list, covering nearly 45 million individuals through 6,100 facilities and more than 726,000 providers. 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.

Pros
  • Innovative healthcare technology

  • Expansive provider network

  • Easy to compare plans online

Cons
  • Past issues with mental health coverage

  • Low ratings on ConsumerAffairs

UnitedHealthcare is part of UnitedHealth Group, the country’s biggest health insurer, with more than 855,000 providers. The company has been in business since 1974 and has an A- rating from AM Best. UnitedHealthcare 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. Last year, 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 more than 130 countries. The company works with 250,000 employers, 726,537 physicians, 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.

Best for Customer Service: Humana

Humana

 Humana

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. 

Pros
  • Strong customer service

  • Large provider network

  • Plan details on website

Cons
  • Not available in all states

Humana is one of the nation’s largest insurance companies and is broken up into regional providers in 20 states. The company has been insuring people since 1961 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: Small businesses with two to 50 employees
  • Efficiency: Small businesses with two to 50 employees (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.  

Best for Health Expense Fund Options: Aetna

Aetna

Aetna

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.

Pros
  • Health expense fund options

  • Large provider network

  • High levels of customer satisfaction

Cons
  • 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—and 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.

Best for Preventative Care: Kaiser Permanente

Kaiser Permanente

 Kaiser Permanente

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. 

Pros
  • Strong emphasis on preventative care

  • Detailed plan information on website

Cons
  • Only available in nine states

  • 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. Many people are still struggling to get timely care, according to a recent Los Angeles Times report.

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 86,577 physicians and 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.  

Best for Plan Options: Cigna

Cigna

 Cigna

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.

Pros
  • Range of plan options

  • Large provider network

Cons
  • 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 ranked high on the J.D. Power 2020 U.S. Commercial Member Health Plan Study. 

Cigna is a global company with 180 million customers 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. Of note, it only offers coverage for companies with two to 24 employees in Arizona.

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

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 can range from $6,412 to $7,675 for individuals to $18,980 to $21,683 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.    

Article Sources

Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in our editorial policy .
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