July 10, 2023

Exploring Startup or Small Business Health Insurance

In this article, we will explore different affordable startup or small business health insurance options. Starting a new business can be challenging, and providing health insurance to employees can be a significant expense. The average annual cost of health insurance for small business owners is $6,589 per employee and employees pick up an average $1,244, according to Kaiser Family Foundation’s 2021 Employer Health Benefits Survey. However, there are several options that owners or new founders can consider to provide affordable health insurance coverage to their employees.

Health Insurance Marketplaces (SHOP):

The Small Business Health Options Program (SHOP) is a part of the Affordable Care Act (ACA) and allows small businesses to purchase group health insurance plans. Depending on the size of your business, you may be eligible for tax credits to help lower the cost.

Private Health Insurance Brokers

Working with an insurance broker can help you navigate the complexities of the health insurance market. Brokers can provide options from multiple insurance providers and assist in finding the most cost-effective plans for your business or startup.

Association Health Plans (AHPs)

Some small businesses can join together through trade or professional associations to access health insurance plans typically only available to larger organizations. AHPs may offer cost savings and more plan options.

Health Reimbursement Arrangements (HRAs)

With an HRA, the employer reimburses employees for qualified medical expenses, including health insurance premiums. This allows businesses to provide a health benefit without offering a traditional group health insurance plan.

Cafeteria Plans (Section 125 Plans)

These plans allow employees to choose from a menu of benefits, including health insurance, with pre-tax dollars. This can be a cost-effective way to offer health benefits.

Other Options

If the workers at your startup or small business are independent contractors, consider introducing them to platforms that can provide them with personalized payroll and a menu of health and retirement benefits. Platforms, like Opolis, remove the burden of health insurance from small businesses by giving their contractors employer services like benefits and tax compliance.


In conclusion, there are several affordable startup or small business health insurance options from which to choose. It is important for startups to carefully evaluate their needs and budget to determine the best option for their specific situation. By providing affordable health insurance, startups can attract and retain top talent while ensuring the well-being of their employees.