Health Insurance Options for Small Business Owners

Getting health insurance can be tricky if you’re a business owner. This guide outlines five options small business owners should consider. Each option offers unique advantages and considerations, so you can make informed decisions based on your individual needs, budget, and eligibility.

1. COBRA may be available if you recently left a job.

   After leaving an employer that provided health benefits, you may be able to continue insurance coverage under COBRA. COBRA is available from companies, with 20 or more employees, that sponsor group health plans.1 Former employees and family members may continue coverage for 18 or 36 months, depending on the qualifying event.2 Enrollees may have to pay up to 102% of coverage costs.
   
   If you qualify, you’ll receive an election notice explaining your COBRA rights and deadlines. You then have at least 60 days to choose coverage beginning with either the notice date or the date your coverage ends. However, your former employer won't subsidize your premiums. This sometimes means COBRA is a more expensive option. However, keeping your existing coverage may mean a lower deductible, better coverage or a broader provider network than you'll find with health insurance you purchase through other providers. The price difference may be insignificant if your alternative is to buy through a state healthcare exchange and you don't expect to qualify for Affordable Care Act subsidies.
   
   

2. Business owners with employees can buy coverage through the Small Business Health Options Program (SHOP) Marketplace.

   The Small Business Health Options Program (SHOP) Marketplace is a way for eligible small employers to offer group health (and sometimes dental) insurance to employees. SHOP is designed for businesses with 1–50 full-time equivalent employees (up to 100 in some states) that want to provide coverage to full-time staff. Participation and employer-contribution rules may apply and can vary by state.3 Companies with no employees aren’t eligible to participate in SHOP.
   
   To use SHOP, the employer selects the plan(s) to offer and decides how much of the premium to pay, then employees enroll in the coverage you make available. In many states, participating insurers or SHOP-registered agents or brokers purchase coverage (rather than directly on HealthCare.gov). Buying a plan through SHOP may also help some employers qualify for the Small Business Health Care Tax Credit if they meet IRS requirements.
   
   

3. Self-employed individuals can find ACA-approved plans and possible financial assistance in the Health Insurance Marketplace.

   Freelancers, contractors and gig workers can purchase health insurance through the Health Insurance Marketplace. The Marketplace offers a variety of plans that meet the requirements of the Affordable Care Act, and you may qualify for premium tax credits or subsidies based on your income.4 Enrollment is typically available during annual Open Enrollment November 1 – January 15, but certain qualifying life events allow for Special Enrollment periods.5
   
   

4. An insurance agent or broker can help you identify a plan that’s right for you.

   An independent health insurance agent or broker can help you shop around for insurance options that aren't available through HealthCare.gov, compare them to your options on the Marketplace, and help you navigate any health insurance subsidies for which you're eligible.
   
   An agent or broker can also help you enroll in short-term health insurance if you're outside the Open Enrollment Period for traditional plans and don't qualify for a Special Enrollment Period, though availability may vary by state.6
   
   Use the “Find Local Help” tool on HealthCare.gov for a list of agents and brokers near you.7
   
   

5. Professional or trade associations offer health insurance.

   If you're a member of a professional association or trade organization, you may be able to buy health insurance through the organization. For members, group plans with lower rates than those offered to individuals are available, like the lower group rates small businesses receive. Some organizations that offer health insurance benefits include the Small Business Service Bureau8 and Freelancers Union.9
   
   Before you join, consider the cost of membership and the value of the benefit you'll receive. Even if cheaper insurance is available to members, you'll need to make sure you save at least enough to offset the cost of any membership fees. And be aware buying an insurance plan off the exchange typically only makes sense if you don't expect to qualify for any premium subsidies through the ACA.

Take charge of your health and finances with the right insurance choice.

Navigating health insurance as a small business owner can be challenging but you do have options. Understanding the available options is crucial for protecting your health and financial well-being. A financial professional can help you compare plans and ensure you find the best coverage for your unique situation. For more details, contact a Synovus Business Banker, call 1-888-SYNOVUS (1-888-796-6887) or stop by one of our local branches.