How to Get Health Insurance for Employees

Getting health insurance for employees can feel like stepping into a maze, but it doesn’t have to.

Small business team discussing options on how to get health insurance for employees during a meeting with laptops and notes.

For many small businesses, the decision gets delayed year after year. Premiums look unpredictable. Acronyms like ACA, HRA, and HDHP blur together. Meanwhile, talented people are quietly choosing jobs that include coverage.

Healthcare costs keep climbing. A typical employer-sponsored health plan for a family now costs over $35,000.

Analysts expect costs will increase another 9% in 2026 if employers don’t make changes fast. Fortunately, employers are no longer limited to one expensive group plan.

Newer models, like ICHRA (Individual Coverage Health Reimbursement Arrangements), QSEHRA, and well-built high-deductible plans with Health Savings Accounts (HSAs), give small companies real cost control and flexibility.

This guide breaks down how to get health insurance for employees in 2026 without getting lost in compliance or crushed by cost.

You’ll get a clear look at every major path, see what the Affordable Care Act (ACA) really asks of employers, and leave knowing which option fits both your budget and your crew.

Understanding Your Options: Types of Health Insurance for Employees

For decades, one option dominated: the standard group health plan.

That’s changing fast. Small businesses now have new ways to cover teams. Some lower cost, some more flexible, and some surprisingly simple once you know how they work.

The most common plan is the group plan.

A group plan aggregates your staff under one insurance contract. Fully insured versions offer simplicity. You pay premiums, the insurer handles risk. Level-funded or self-funded versions shift more risk to you, but can offer upside if claims stay low. Many such plans secure stop-loss insurance to limit exposure.

PPO, HMO, EPO, POS – the alphabet soup of plans mostly differs by how wide the doctor network is and whether you need referrals. In general, the tighter the network, the less you’ll pay each month.

Alternative Options for Small Businesses

Traditional group plans work for many employers – but they’re no longer the only way to cover a team.

In the last few years, several new models have opened the door for small businesses that felt priced out or stuck.

High-Deductible Health Plans + HSAs

Plenty of small companies go with a high-deductible health plan (HDHP) and add a Health Savings Account (HSA) on top.

It keeps premiums lower while giving employees a way to set aside pre-tax dollars for care. In 2026 an HDHP has to start at $1,700 for single coverage and $3,400 for a family. Out-of-pocket costs can’t go past $8,500 and $17,000. HSA limits rise too – up to $4,400 if you’re solo and $8,750 for families.

Individual Coverage HRAs (ICHRA)

An Individual Coverage Health Reimbursement Arrangement lets you give employees a set monthly allowance and send them to the individual market to buy their own plan.

The company’s spend is capped and predictable, while employees pick coverage that fits their family or region. This approach is especially popular with remote or multi-state teams because it avoids juggling separate group contracts.

QSEHRA

A cousin to ICHRA, QSEHRA works well if you have fewer than 50 full-time workers.

You reimburse premiums (or qualifying expenses) tax-free, under set IRS caps. It’s simpler to manage than full group plans for early-stage companies.

Health Sharing Programs

Health sharing isn’t insurance, but some very small teams use it as a lower-cost safety net.

Members pay a monthly “share,” and the community helps with eligible bills. It can save significant money but comes with real trade-offs: no legal guarantee of payment and limits on what’s covered. It suits some startups or mission-driven groups but requires clear communication, so employees understand the risks.

Stipends and Allowances

Some employers skip formal plans and simply add a health stipend to paychecks.

It’s easy to start and flexible, though taxable and not regulated as insurance. For many, this is a first step, later replaced with a QSEHRA or ICHRA once the company wants tax efficiency and more compliance protection.

Hybrid Strategies

If you’re unsure, mixing models is still an option.

A small on-site team might keep a group plan while remote staff use an ICHRA. Some companies offer a basic high-deductible plan and add an allowance for those who want to shop privately. The mix lets employers stay cost-aware without offering nothing at all.

Legal Requirements and Compliance (What You MUST Know)

Before anyone signs a policy, it’s smart to know what the law actually expects of an employer, and where you still have room to choose.

The ACA Employer Mandate

Once a company averages 50 or more full-time equivalent employees, the ACA treats it as an Applicable Large Employer (ALE).

That triggers a rule: offer affordable, minimum essential coverage to at least 95 % of full-time staff or risk penalties.

“Affordable” has a specific definition. In 2025, an employee’s share of the lowest-cost self-only plan can’t exceed 9.02 % of household income. The number tweaks slightly each year but usually stays around nine percent.

Under 50 Employees

Here’s the good news for most small businesses: if you average fewer than 50 FTEs, there’s no federal mandate to offer health insurance.

Many owners still do – not out of obligation, but to attract and keep people. Tools like QSEHRA and ICHRA exist largely to make that jump easier and more predictable.

ERISA Basics

Even a lean plan counts as an ERISA plan. That means a few must-do items:

Hand out a Summary Plan Description (SPD) so employees know what they’re signing up for.
Provide a Summary of Benefits and Coverage (SBC) before enrollment.
Manage the plan in employees’ best interests – that’s the fiduciary duty.

The Department of Labor breaks down these duties here

COBRA and State Continuation

Have 20 or more employees? Federal COBRA rules apply.

Departing workers (and dependents) can keep your plan for up to 18 months, sometimes longer. Some states even have “mini-COBRA” rules that apply to smaller teams, it’s worth checking early.

Reporting and Notices

ALEs file IRS Forms 1094-C and 1095-C each year.
All group plans must provide SBCs, COBRA notices, and other required disclosures.
Missed notices can cost more than you think – penalties can hit $100+ per employee per day.

Association Health Plans & MEWAs

Buying coverage through an association or multi-employer welfare arrangement comes with rules.

A 2018 push to loosen Association Health Plan (AHP) rules was mostly rolled back in court. MEWAs remain heavily regulated – both by the Department of Labor and individual states, because many failed in the past, leaving employers and workers unpaid claims. They can work, but only if you’re sure the plan is well-capitalized and compliant.

Compare Pricing on the Best HealthShare Plans Available

Step-by-Step: How to Get Traditional Group Health Insurance

Alternative options are becoming more popular, but many companies wondering how to get health insurance for employees fast still stick with basic group plans.

The trouble is, deciding on a traditional group plan is one thing. Figuring out how to actually buy one is another. The good news: it’s a clear process once you know the order of steps. Most small businesses can go from “we should offer benefits” to active coverage in about two to three months.

1. Start With a Real Budget

Before talking to a broker or picking a carrier, decide what you can realistically spend.

Health coverage isn’t cheap, and prices have been climbing. In 2025, average annual employer health insurance costs per employee were estimated to be around $16,000.

Many employers split the cost with staff. A 70/30 split – the company pays 70% of the single premium – is common. Some go 50/50 to control expenses. Setting a limit now helps you avoid surprises later.

2. Decide Who Qualifies

Next, define eligibility.

Under the Affordable Care Act, anyone averaging 30 hours a week counts as full time. Companies often use a waiting period of 30 to 90 days after hire, before new employees can join.

This decision shapes cost and participation. A vague rule can lead to confusion, or worse, unexpected bills if part-time staff assume they’re included.

3. Know the Participation Rules

Insurance carriers don’t want a plan made up only of people who expect high medical bills.

Most require that about 70% of eligible staff enroll. If some workers will decline because they have other coverage like a spouse’s plan, VA benefits, or Medicare, tell your broker. Carriers usually count those employees toward the minimum even if they don’t sign up.

4. Decide How You’ll Shop for Coverage

Once the numbers and eligibility rules are clear, you need a way to buy the plan.

Most small businesses turn to a licensed broker. A good broker knows which insurers will even write small-group policies in your state, can warn you about hidden participation rules, and usually doesn’t charge you, they’re paid by the carrier.

Some owners skip help and shop straight from carriers or online marketplaces. It can work, but you’re on the hook for all the fine print and compliance dates. If you use a broker, find one who’s independent and works with several carriers, not just the company paying them the biggest commission.

5. Compare the Plan Designs

Group coverage isn’t built on one template. Common flavors include:

PPO: Wide networks, no referral needed, but usually pricier.
HMO: Lower premiums, tighter networks, referrals often required.
EPO: In-network only like an HMO but no referrals.
POS: A mix – primary care gatekeeper but some out-of-network help.
HDHP: Lower monthly premiums, higher deductibles, HSA-friendly.

Don’t stop at the premium. Check deductibles and the legal caps on out-of-pocket costs. In 2026, a high-deductible plan must start with at least a $1,700 single and $3,400 family deductible and can’t exceed $8,500 / $17,000 in total out-of-pocket spending.

Those limits tell you how much risk an employee carries before full coverage kicks in.

6. Request Quotes – Then Read the Fine Print

With the basics mapped, it’s time to see actual prices.

Your broker or the carriers will run quotes based on your workforce and budget. When they come back, look deeper than the headline premium:

What’s the employer share vs. employee share?
Have renewal rates been stable or do they spike after year one?
Does the network include the hospitals and doctors your team uses?
How is pharmacy coverage handled – especially for costly new drugs like GLP-1s?

If you employ people in different states, ask early about multi-state networks or consider an ICHRA to keep things simple.

7. Sign the Paperwork and Get Enrollment Rolling

After you’ve picked a plan, there’s some housekeeping.

Carriers want an updated employee list with names, ages, work status, dependents. You’ll sign the contract and set up payroll deductions so premiums flow smoothly.

Enrollment windows are usually two to four weeks. Most insurers now have simple online portals, but paper packets still exist if your crew isn’t sitting at desks. The main goal: give every eligible worker a fair shot to sign up.

8. Explain the New Benefit Clearly

A health plan only helps retention if people understand what they’re getting.

Keep the rollout plainspoken:

What you’re paying vs. what they’ll pay.
Big numbers that matter – deductible, out-of-pocket cap, HSA option if offered.
Where to go for help (your broker, HR contact, or a call with the insurer).

One short meeting or Q&A call often clears up confusion and makes the benefit feel real.

9. Keep the Plan Updated Year-Round

Once live, the work doesn’t stop.

Keep your employee list clean as the year moves – add hires, drop anyone who leaves, and watch part-timers who tip into full-time. Update notices when you make changes.

If you’re counted as an Applicable Large Employer, the IRS wants Forms 1094-C and 1095-C every year to show you offered affordable coverage.

10. Revisit Each Year Before Renewing

Don’t auto-renew.

Renewal rates don’t always stay steady. Before agreeing to another year, see what your carrier wants to charge, look over any claims info you’ve got, and grab a few outside quotes.

If the price keeps creeping up, a high-deductible plan with an HAS, or even an ICHRA, can help lock your costs. Markets shift quickly; that one yearly check can save a small business from paying more than it should.

Health Insurance for Employees: Cost Considerations and Budgeting

One of the biggest challenges of choosing small business health insurance will always be figuring out the budget.

The mistake many companies make is treating health coverage as one giant, fixed bill. In reality, several moving parts let you control cost without gutting the benefit:

Your contribution policy: Decide early if you’ll cover a flat dollar amount or a percentage of the premium. Flat allowances make costs predictable; percentages scale with whatever plan you choose.
Plan tiers: Some employers offer a lean base plan and a richer “buy-up” option. This lets cost-conscious staff keep expenses down while others can pay more for better coverage.
Defined allowance models: Options like ICHRA and QSEHRA let you cap spending per employee each month. These models are growing fast among startups and remote-heavy teams because they eliminate renewal surprises.
Supplemental tools: Wellness stipends, telehealth subscriptions, or mental health benefits can boost perceived value without adding a huge premium load.
Tax leverage: Premium contributions, HRA funds, and HSA contributions are typically deductible. If you qualify for the Small Business Health Care Tax Credit, it can offset part of your spend for the first couple of years.

Remember the participation factor. Plans price better and stay compliant if enough eligible employees enroll. Clear communication and a fair employer share usually solve this, but some companies also use sign-up bonuses or first-month premium holidays to nudge participation.

Choosing the Right Coverage for Your Business

Picking a plan isn’t just a spreadsheet exercise; it’s about matching real people with a benefit your company can sustain.

Consider your staff: Begin with the people you employ. A young, mostly single workforce may lean toward lower premiums and higher deductibles if paired with a small HSA contribution. A team with families or chronic conditions will look for richer coverage and predictable bills.
Think remote: Remote workers add another layer – a single group plan can stumble across state lines, which is why some employers choose an ICHRA instead of wrestling with multi-state carrier rules.
Explore costs: Next, face the budget question honestly. Can the business handle steady premium increases, or would it be safer to set a fixed monthly allowance and stop worrying about renewal shocks?
Think about predictability: Defined contribution models like QSEHRA or ICHRA make expenses predictable. A traditional plan might save money if your group is young and healthy, but the cost risk stays with you.

When you sit down with a broker, ask open questions rather than just “what’s cheapest.” How have similar companies handled growth past fifty employees? Which carriers tend to keep renewal hikes reasonable? What support will you get on compliance filings? The way someone answers is as telling as the numbers they show.

Be cautious of shortcuts. A single-carrier pitch, rock-bottom first-year premiums with vague renewal terms, or association deals that gloss over regulation are warning signs.

Don’t wait for a perfect, future-proof answer. Many small employers start with a simple plan or a modest allowance, then upgrade as the team and revenue grow. Forward motion beats paralysis – and employees notice when you try.

Implementation and Enrollment

Rolling out a health plan isn’t complicated, but it works better if you treat it like a short, focused project instead of a formality.

Give yourself enough runway. Carriers usually want a couple of months before the start date to process contracts and set up payroll deductions. If you’re rushing, mistakes happen – wrong deductions, missing dependents, delayed ID cards.
Tell your team what’s coming. A single HR email isn’t enough. People want to know two things: how much it will cost them and what it actually covers. Spell that out in plain language. If there’s an HSA or a reimbursement account, walk through an example: “You can put in $X pre-tax and use it for prescriptions or a doctor visit.” Short Q&A sessions, even an informal Zoom session, can clear confusion fast.
Use tools that won’t slow you down. Paper still works, but if you’re growing, a simple online enrollment portal saves hours. Some brokers include one for free; others point to affordable platforms. What matters is being able to add or remove employees without drowning in forms.

Once the plan is live, keep an eye on payroll deductions and eligibility changes. New hires, people who leave, staff moving from part-time to full-time — it all affects coverage. Missing these updates is one of the quickest ways to end up out of compliance or with angry employees at the doctor’s office.

Health Insurance for Employees: Common Mistakes to Avoid

Plenty of well-meaning employers stumble when they first set up health benefits. Here are the missteps that come up most often:

Choosing a group plan automatically: Group plans aren’t ideal for every business. Many alternative ways to offer health insurance for employees are becoming more affordable, and more appealing to modern teams.
Picking the rock-bottom premium: Cheap plans usually hide sky-high deductibles or extremely narrow networks. Employees end up frustrated or leave for better coverage, which costs more than you saved.
Going quiet after launch: Announcing the benefit once and never explaining how to use it leaves staff guessing. Simple updates or a short Q&A each year keep people engaged and reduce confusion.
Skipping compliance details: ERISA notices, COBRA continuation, ACA filings – they’re easy to miss and expensive to ignore. If paperwork isn’t your strength, let a broker or benefits platform track deadlines for you.
Letting renewals roll over unchecked: Rates creep up quietly. Shopping the market once a year or asking your broker to compare options keeps pricing honest and prevents surprise hikes.

Avoiding these mistakes keeps costs manageable and helps employees actually value the benefit you’re paying for.

2026 Trends and What’s New

If you’re just beginning to think about how to get health insurance for employees now, it’s worth noting that the landscape is changing.

These are the trends shaping decisions right now – backed by current data and policy updates:

Premiums are climbing faster than inflation

Employer health plan costs rose about 6.5% in 2024 and are projected to jump another 9% or more in 2026.

This makes budgeting, and considering various options more important. High deductible plans, or predictable-cost models like ICHRA may more appealing for employers with limited cash to spend.

Remote and multi-state workforces are breaking the single-plan model

As the workplace changes, health benefits and plans change with it.

Health insurance is still regulated and priced at the state level. If your team is spread out, you may end up juggling several small group contracts. Many employers sidestep that hassle with an ICHRA, letting each worker buy a local plan that fits where they actually live.

Mental health and well-being benefits are essential

Holistic wellbeing is becoming a priority for all employees.

More than eight in ten workers now say mental health coverage shapes where they choose to work. To keep pace, smaller companies are weaving in affordable perks — teletherapy stipends, mental health app access, even coaching sessions — without having to overhaul their main plan.

Telehealth remains strong post-pandemic

Demand for flexible care is becoming more important for workers too.

Nearly two-thirds of employers now include virtual care in their main plan, and usage continues to climb. For small companies, it’s a way to expand access without raising premiums. It could also be a good way to attract and retain staff.

Regulations keep evolving

The ACA’s affordability threshold (around 9% of income) updates each year, and the IRS raised HSA and HDHP limits again for 2026.

Staying current matters: outdated limits can make a plan noncompliant without anyone realizing. If you’re uncertain about anything, speak to an expert before you roll out plans.

Defined contribution models are accelerating

Adoption of ICHRA and QSEHRA grew sharply in 2024 and is expected to keep climbing in 2025–26 as smaller employers look for budget control and remote flexibility.

Interest in other, alternative approaches to health insurance for employees is growing too. Don’t assume you’re limited to historical standards.

Getting Health Insurance for Employees in 2026

Figuring out how to get health insurance for employees that works for your team, and your company can be complicated.

However, it doesn’t have to be the overwhelming, budget-breaking journey that many business leaders fear.

A few years ago, a small company’s only real option was a single, expensive group plan. That’s not the case anymore. Between traditional plans, ICHRA, QSEHRA, and other flexible setups, it’s possible to build something affordable and useful, even if you’re starting small.

Don’t wait until every piece feels perfect. Start with something you can pay for and manage today, watch the key compliance rules, and revisit choices each year. As the company grows, you can upgrade or switch without tearing everything apart.

If you’re ready to see what fits your business right now, it’s easy to take the next step, Get a free quote for small business health insurance options today, and see the real numbers before you decide.

Further Reading:

Becky Otteman

Hi I’m Becky Otteman. I bring over 40 years of experience in healthcare and business to my role as a Personal Benefits Manager at HSA for America. Read more about me on my Bio page.

How to Get Health Insurance for Employees: Complete 2026 Guide