Small group health insurance
Small group health insurance is a plan bought by an employer with up to 50 employees (up to 100 in California, Colorado, New York and Vermont), sold under federal rules that the Affordable Care Act set out.
Those rules decide how a carrier may price your group, what the plan must cover and who must be offered a place. Knowing them makes a renewal much easier to read.
A free matching service for employers, not a broker or insurer. We introduce you to a licensed broker and tell you who they are before anything is shared. No plan, tax or legal advice. How it works
What small group rules mean for you
- Carriers cannot turn a small group down or price it on employees' health history.
- Premiums can vary only by age, location, tobacco use and plan category (healthcare.gov).
- Plans must cover the ten essential health benefits.
- Carriers can set minimum participation and employer contribution rules.
- Outside the year-end window, a group that misses participation can be declined until then.
- Groups that grow past the small-group line move to large-group rating.
Small group, by the numbers
| Rule or benchmark | Figure |
|---|---|
| Small group size, most states Average employees in the prior year | 1 to 50 |
| Small group size, CA, CO, NY, VT States that kept the wider definition | 1 to 100 |
| Factors that may change a premium Age, location, tobacco use, plan category | 4 |
| Covered workers in level-funded plans Smaller firms (10 to 199 workers), KFF 2026 | 38% |
| Single deductible of $2,000 or more Share of covered workers at smaller firms, KFF 2026 | 55% |
Sources: healthinsurance.org small group definition, healthcare.gov on how premiums are set and KFF 2026 Employer Health Benefits Survey. Read October 28, 2026. General information, not insurance or legal advice.
Six things to check on a small group quote
A broker should be able to show each of these on the quote or proposal itself.
Metal level and network
Bronze, silver, gold or platinum, and whether the network is an HMO, PPO, EPO or POS. A cheaper plan with a narrow network can cost employees more.
Rates by employee
Small group premiums are built per person from age bands. The quote should show each employee's rate, not just a total.
Participation requirement
The share of eligible employees who must enroll, and whether people with other cover (a spouse's plan, Medicare) count as waivers.
Your contribution
The minimum the carrier asks you to pay, and how your chosen contribution changes what each employee pays per paycheck.
Waiting period
How long new hires wait before cover starts. Federal law caps waiting periods at 90 days.
Renewal terms
The plan year, when the renewal will arrive and what happens if your headcount crosses the small-group line.
Comparing small group options for the first time? A licensed broker can lay them out side by side for you.
Find a licensed brokerSetting up a small group plan
Confirm eligibility
At least one employee who is not an owner or spouse, a business address in the carrier's area and a payroll record.
Census and quotes
Names or initials, dates of birth, ZIP codes and cover tier. No medical questions are asked in the fully insured small group market.
Applications
Employer application, employee enrollment or waiver forms, and the first month's premium.
Effective date
Most carriers can start a plan on the first of any month if paperwork arrives in time.
Questions people ask
What counts as a small group for health insurance?
Under federal rules, an employer with 1 to 50 employees in most states. California, Colorado, New York and Vermont extend small group to 100. The count is based on the average number of employees in the prior calendar year. A broker will confirm how your state counts.
How are small group premiums calculated?
Each employee's rate is based on age, the plan chosen, the area and, in many states, tobacco use. Carriers cannot use health status or claims history in the small group market. The healthcare.gov explanation covers the factors.
Is there a minimum participation rate?
Many carriers ask for around 70% of eligible employees to enroll, but rules vary by carrier and state. In the November 15 to December 15 window each year, small groups can enroll in SHOP plans without meeting the minimum.
Do employers have to pay part of the premium?
Carriers usually set a minimum, often 50% of the employee-only premium. To claim the small business tax credit, the IRS requires at least 50% of employee-only cover. Your broker can show the carrier's rule on the quote.
Can a small group plan include family cover?
Yes. You choose whether to offer cover for spouses and children, and whether to contribute to it. Many small employers contribute to employee-only cover and let employees pay the extra for dependents.
Talk to a broker about small group cover
Three short steps: where the business is, what you have now, and who to speak to. It takes about two minutes and asks nothing about anyone's health.
- Free for employers. The broker pays us a flat fee per introduction.
- One broker, named to you first, with their state license number.
- No advice from us. Plans, rates and tax questions go to the licensed broker.
We are a free matching service, not a broker or insurer, and we do not quote or recommend plans. We look for a licensed benefits broker who suits your business and tell you who it is; your enquiry goes to them only with your go-ahead.
Thanks, your enquiry is in.
- Within one business day we will email or call to tell you which licensed benefits broker we have found, with their license number.
- Your details reach that broker only if you say yes.
- The broker reviews your renewal or your options and talks you through them. Whether to work with them is your choice. No marketing from us, ever.