Best Health Insurance Providers for Small Business Owners

Blue Cross Blue Shield is the best health insurance for small business owners

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Health insurance for small business owners enables companies to provide more affordable access to medical insurance for their employees. These are typically group policies, which means numerous people from the company are enrolled, helping everyone obtain lower rates or better coverage. These policies are tailored to smaller companies who may wish to offer health coverage to sway top talent to work with them over the larger competition.

The best small business health insurance providers offer competitive rates, flexible coverage options, access to a strong network of medical providers, and availability. Health insurance companies may tailor policies to meet the benefits employers wish to provide to their employees, sometimes offering dental and vision coverage as well as comprehensive medical coverage, giving employees more options.

Best Health Insurance for Small Business Owners of 2021

Best Health Insurance Providers for Small Business Owners
Best Health Insurance Providers for Small Business Owners

Best Overall : Blue Cross Blue Shield


Blue Cross Blue Shield

Blue Cross Blue Shield

  • No. Policy Types: Varies from state to state
  • No. States Available: 50
  • Providers In Network (#): Over 385,000
Why We Chose It 

As one of the largest health insurance providers in the country, Blue Cross Blue Shield offers ample coverage options for most small business owners. It also offers data-driven healthcare solutions to enable cost-effective options for many companies. It's the insurance company for those who need flexible options.

Pros and Cons
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

Overview

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 overall ratings of 2.5 to 4.5 on a scale of 1 to 5 from NCQA.

BCBS companies also ranked highest on eight of the 21 award-eligible regions on the J.D. Power 2021 U.S. Commercial Member Health Plan Study. 

BCBS provides coverage in all 50 states, plus Washington, D.C., and Puerto Rico, and works with over 90% of the nation's hospitals and doctors. The company also underwrites international coverage in over 190 countries through BCBS Global. 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 for businesses with less than 50 employees, covering nearly seven million people who work for small employers. BCBS has various network options, with BlueCard PPO taking the lead for its expansive network, including 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

  • No. Policy Types: Varies by state
  • No. States Available: 50
  • Providers In Network (#): Over 1.3 million
Why We Chose It

With a large number of in-network providers and thousands of facilities throughout the country, UnitedHealthcare offers a solid option for most small businesses. Its large annual investment in technology also enhances the company's ability to continuously meet the ever-changing needs of consumers with better products and improved plan coverage.

Pros and Cons
Pros
  • Innovative healthcare technology

  • Expansive provider network

  • Easy to compare plans online

Cons
  • Past issues with mental health coverage

  • Mixed ratings on ConsumerAffairs

Overview

UnitedHealthcare (UHC) has been in business since 1977 and has an A rating from AM Best. Its overall ratings ranged from 2.5 to 4.5 on a scale of 1 to 5 from NCQA. For a company of its size, UHC did not rank highly in the J.D. Power 2021 U.S. Commercial Member Health Plan Study.

One thing to be aware of: UHC has a troubled reputation for its mental health coverage. In February 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 Symptom Checker, which uses artificial intelligence to give basic medical advice. 

UnitedHealth Group is situated in all 50 states and has international operations, operating in more than 300 other countries. The company works with more than 1.3 million healthcare professionals and 6,500 hospitals in the United States.

If your small business has between two and 50 employees, you can compare plans online. You can answer a few questions and get a tailored recommendation, or you can call a local sales representative.

Best for Customer Service : Humana


Humana

Humana

  • No. Policy Types: 5
  • No. States Available: 18
  • Providers In Network (#): 350,000
Why We Chose It

Humana is one of the best health insurance providers for small business owners because of its top-notch customer service with readily available associates to answer questions quickly. It also has a large provider network with ample options for flexible deductible and premium combinations, providing businesses with the flexibility to find what they need.

Pros and Cons
Pros
  • Strong customer service

  • Large provider network

  • Plan details on website

Cons
  • Not available in all states

  • Some costs potentially higher for flexible spending accounts

  • Limited coverage and smaller network

Overview

Humana is one of the nation's largest insurance companies for individual plans and Medicare options and offers group medical coverage for small businesses (between 2 and 50 employees) in 18 states. The company began in 1961, has been providing health insurance since 1984. They have earned an A- rating from AM Best and received 2.5 to 4.0 overall ratings on a scale of 1 to 5 from NCQA. Additionally, the company ranked high in J.D. Power's 2021 U.S. Commercial Member Health Plan Study.

Humana works with millions of medical and specialty partners throughout most of the country. Humana's network is 350,000 medical providers and 3,000 hospitals. 

Humana has five plans for small and large businesses:

  • Canopy: Good for people with minimal health needs. The premiums are low-cost, and it's only a $20 copay to see a primary care physician. Preventive care is free.
  • Efficiency: Lowest premium option. Preventive care is free with in-network providers.
  • Simplicity: No deductible for visits within the network, and copays are straightforward. Preventive care is free.
  • HDHP: High deductible with no copays. Most plans are HSA-eligible.
  • Copay: Copays for preventive care, telemedicine, and pharmacy.

Depending on where you live, the cost of these plans may vary. Humana 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

  • No. Policy Types: Varies by state
  • No. States Available: 50
  • Providers In Network (#): 700,000
Why We Chose It

Small businesses may appreciate the high-deductible health insurance plans available from Aetna. It's also recognized for its customer service and tax-advantaged savings options that may better fit some employee needs.

Pros and Cons
Pros
  • Health expense fund options

  • Large provider network

  • High levels of customer satisfaction

Cons
  • Not available in every state

  • Less informative website info for decision making

  • Costs variable, hard to determine without sales rep help

Overview

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 2.5 to 4 on a scale of 1 to 5 with NCQA. The company shows mixed rankings on the J.D. Power's 2021 Commercial Member Health Plan Study.

Aetna isn't available in every state, but the company has a large global footprint, with more than 700,000 primary care doctors and over 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, with no referral needed. Best deals are for in-network visits. 
  • Traditional Choice Health Insurance Plan: Visit any licensed provider or facility; you pay upfront and submit your claim for reimbursement. You will need to know the ins and outs of your Plan Design and Benefits Summary.
  • 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 Aetna. 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

  • No. Policy Types: 6
  • No. States Available: 8 states and the District of Columbia
  • Providers In Network (#): 23,200+
Why We Chose It

Kaiser Permanente's long history of quality customer service and its comprehensive website with ample educational resources makes it a good choice for many. More so, we recognize the company's aggressive preventative healthcare services that aim to keep employees healthy longer.

Pros and Cons
Pros
  • Strong emphasis on preventative care

  • Detailed plan information on website

Cons
  • Only available in eight states plus Washington DC

  • Slow mental healthcare treatment

Overview

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 ranks highest for four of the 21 award-eligible regions on the J.D. Power 2021 U.S. Commercial Member Health Plan Study. Kaiser ranked highest in customer service for health insurance companies on Newsweek's Best Customer Service Companies in 2021.

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
  • HRA and HSA-Qualified 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

  • No. Policy Types: 8
  • No. States Available: 10
  • Providers In Network (#): 35,800
Why We Chose It 

Cigna offers a good range of small business health insurance plans to accommodate most small business needs, including flexible premium and deductible options. While it's only available in 10 states, it has an impressively detailed website, good customer service, and a large provider network to support it.

Pros and Cons
Pros
  • Range of plan options

  • Large provider network

Cons
  • Limited plan details online

  • Mixed ratings on ConsumerAffairs

Overview

Founded in 1792, Cigna has earned an A rating with AM Best. Cigna received 2.5 to 4 overall ratings on a scale of 1 to 5 from NCQA. The company received the highest ratings in four of the 21 award-eligible regions; however, they also received several below-average ratings in the J.D. Power 2021 U.S. Commercial Member Health Plan Study. 

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): National 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 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.  

Final Verdict

From our extensive research, it's clear Blue Cross Blue Shield is the best health insurance for small business owners who want ample coverage across one of the largest networks in the U.S. A large network may mean better options for employees, especially those who need specialist care or wish to stick with their preferred doctors and medical facilities.

Additionally, Blue Cross Blue Shield offers tailored policies to meet the needs of today's small businesses, including various premium and deductible options and plans. Good customer service helps business owners navigate all of those plans, too, making the decision process a bit easier to manage.

Compare the Best Health Insurance for Small Business Owners

Company Plans (#)  Providers In-Network (#)  Deductible  No. States Available 
Blue Cross Blue Shield
Best Overall
Varies by state Over 385,000 Varies by plan 50
UnitedHealthcare
Best Network 
Varies by state  Over 1.3 million  Varies by plan  50 
Humana
Best for Customer Service 
5 350,000  Varies by plan  18
Aetna
Best for Health Expense Fund Options 
Varies by state  700,000  Varies by plan  50 
Kaiser Permanente
Best for Preventative Care 
23,271  Varies by plan 
Cigna
Best for Plan Options 
35,800  Varies by plan  10 

Guide to Choosing the Best Health Insurance for Small Business Owners

As a Small Business Owner, Are You In Need of Health Insurance? 

As a small business, it's important to assess your needs for health insurance plans for employees. Many times, providing access to coverage is a big benefit to employees and one they appreciate. If your company has 50 or more employees, finding affordable health insurance options is essential, especially if you plan to cover some or all of the costs for employees. Even companies with fewer than 50 employees benefit from health insurance coverage, especially if employees want it.

Comparing Health Insurance Companies for Small Business Owners

Choosing health insurance for a small company requires carefully considering several aspects of available coverage in your state. Compare not only several providers but several policies they offer. Some factors to consider include:

  • Types of plans available: Determine if the policy options include options for HMOs, PPOs, or other services. Consider both individual and family plan access.
  • Coverage limits: This includes how much coverage is provided (what is the maximum provided) as well as coverage for each type of service, such as specialist care and preventative care. 
  • Deductibles and copays: In these situations, consider how much the deductible is (how much people have to pay out-of-pocket before insurance kicks in) as well as co-pays (costs the employee pays at the time of service). 
  • Physician coverage: Determine if the employees' physicians are in-network (if a small company) or if there is ample flexibility to meet needs within the plan's network. If employees have preferred healthcare providers, be sure they are in-network.
  • Exclusions: Many health insurance policies have exclusions from coverage including, in some policies, pre-existing conditions. Be sure to consider any exclusions based on how they impact employee needs. 
  • Reputation: The company's reputation also plays a role in this decision. Do they have good reviews and an easy claims process? Also, determine if the company has solid financial ratings. 
  • Premiums: Perhaps most importantly, consider the cost of the policy. Some companies may pay all or a portion of the costs for employees. Others secure the policies and employees pay for their plan themselves. In every case, the policy needs to be affordable to the employees and the company itself. 

Selecting A Health Insurance Policy That Works for You 

Once you have a good idea of what type of coverage to purchase and from whom, the next step is to apply for a policy. Work closely with the insurance company to gather data on the next steps. This generally will include providing all employee names and personal information.

Most often, the insurance provider will set up a time to come to the place of employment to enroll employees and educate them on their options. Others handle this through a set of forms each employee must complete. 

Most of the time, a benefits package is issued, which contains all of the terms and features of the policy and instructs employees on their next steps. It's common to see a booklet outlining information. There may be resources for setting up online accounts and how to start using the policy within this. Some companies have mobile apps, too.

The insurance company will then mail health insurance cards to the covered employees once the policy is active. They will also provide insight into available features, including preventative care services. Employees can then start using their policies as they want and need to do so.

Frequently Asked Questions

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 equivalent employees. If your company has fewer than 25 full-time employees who meet the maximum income threshold (currently less than an average of $50,000 annually), you may be eligible for the Small Business Health Care Tax Credit. In this situation, you must offer SHOP to all of your full-time employees and pay at least 50% of their premium cost.

This tax benefit credits 50% of all premiums paid on company tax returns. Since these are IRS guidelines with amounts changing annually, based on inflation and other factors, it is best to check with your tax advisor on eligibility.

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 $7,470 for individuals and $21,342 for family coverage, according to a 2020 survey from the Kaiser Family Foundation.

Methodology

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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