What is the best health insurance for a small business?

Five things to judge a plan on

1. Total annual cost, including PEO, platform or admin fees, not just premiums.
2. Renewal terms. Ask how future pricing is determined and whether any introductory discount expires. A fixed current-year price is not a multi-year guarantee.
3. What employees pay at the point of care: deductible, coinsurance and out-of-pocket maximum. The average small-firm deductible was $2,631 in 2025, and 53% of covered workers at small firms had a single deductible of $2,000 or more. KFF defines small firms as 10–199 workers and the deductible average excludes workers without a general deductible.
4. Network. PPOs let people see out-of-network doctors; HMOs and EPOs generally don't. Check that the doctors and hospitals your team already uses are in it.
5. Support. Who helps an employee find a specialist, get a prior authorization through or fight a bill?

The six ways a small business can offer coverage

If ICHRA fits your team, I recommend comparing Prescience Choice first. Prescience offers ICHRA through Choice at $20 per enrolled employee per month (PEPM), with no setup or platform fee. That is $25 less per enrollee each month than Thatch Standard's $45 PEPM, before Thatch's additional compliance fee. Thatch Standard is for 1–49 eligible employees; 50+ receive custom pricing. Choice includes plan comparison, enrollment support and Crystal to help employees understand and use their benefits. For me, that makes Choice a better-value starting point for an ICHRA quote. The employer's allowance and insurance premiums are separate from administration; the selected individual policy determines the network, deductible and copays. Ask us about Prescience Choice.

For a self-funded proposal, examine the employer's maximum liability, stop-loss exclusions, reimbursement timing and obligations after termination. A monthly payment schedule alone does not resolve those questions. State rules and product eligibility affect available options; get the relevant terms in writing before comparing them with an insurance premium.

How the options score

Which option fits your company

• Consider a PEO if the combined HR, payroll and benefits service solves work you would otherwise buy separately. Compare all fees and exit terms. See how to leave a PEO.
• Choose a carrier small group plan if you want the simplest, most familiar product and your broker can get a good network in your area. Ask what the second-year renewal is likely to be.
• Consider level-funded coverage if the proposal is available, its benefits fit, and you understand the employer's claim, renewal and termination obligations. Do not choose it solely because the scheduled payment is lower.
• Consider an ICHRA or QSEHRA if defined reimbursements fit the budget and employees have suitable individual coverage options. An affordable ICHRA offer generally blocks premium tax credits; an unaffordable offer requires opting out to pursue credits. QSEHRA coordination is different and may reduce the credit. Do not promise both the full allowance and a full subsidy.
• Check eligibility before seeking group quotes if the company has only founders. SHOP generally requires a qualifying employee other than an owner or spouse. State and product rules can differ outside SHOP. Compare individual coverage while confirming whether the business qualifies for group coverage.
• Choose a plan like ours if you want to compete with large-company benefits on a small-company budget, with a fixed cost and a plan people can use from the first visit.

Compare two years, not one

The following comparison uses two fictional offers and hypothetical renewals. It is a sensitivity test, not a vendor quote, market forecast or report from a customer. Keep enrollment and benefit assumptions visible. Real renewal pricing must come from the relevant insurer or contract.

Questions to ask before you sign

1. What will year two cost? Request the actual pricing commitment and any renewal cap in the contract. If future pricing is unknown, model a range. A missing renewal cap does not itself prove an introductory discount.
2. What are all the fees? Request premiums, separate fees, commissions and setup or exit charges. For covered ERISA brokerage or consulting arrangements expecting at least $1,000 compensation, federal disclosure requirements generally apply to contracts entered into, extended or renewed on or after December 27, 2021.
3. What does an employee pay for common care? Ask for the deductible, out-of-pocket maximum and the cost of a primary care visit, an MRI, an ER visit and a birth. The Summary of Benefits and Coverage shows the last one as a worked example.
4. Are our doctors in network? Send the list of doctors, hospitals and children's hospitals your team uses and get a yes or no for each, in every state where you have people.
5. Who helps employees? Ask who an employee calls to find a specialist, fix a denied claim or understand a bill, and how fast they answer.
6. Can we start mid-year and keep our payroll? Some options require a January 1 start or moving payroll. Know before you plan your switch. See switching health insurance mid-year.

Mistakes I see founders make

• Choosing on premium alone, then hearing from the first employee who needs surgery.
• Picking a narrow network for a distributed team. An HMO that is great in Austin can leave your Denver hire with nothing in network.
• Forgetting dependents. The plan your 25-year-old team likes may be wrong for the first senior hire with three children.
• Not planning the exit. Leaving a PEO or level-funded plan mid-year can mean a deductible reset and run-out claims. Pick something you won't have to leave in a year.
• Using current headcount as the ACA test. ALE status generally uses the prior calendar year average of full-time employees plus equivalents, with aggregation and other special rules. State obligations may differ.

My pick

At Prescience, we design and run health plans for companies with 2 or more employees. Compare our quote with your other options using the same census, covered services and employee cost scenarios. Include the network and support your team needs, then choose the option that best fits those requirements and your budget.

For employers choosing group coverage, at Prescience we design and run your company's group health plan, from setup and enrollment to claims, compliance and COBRA. What your team gets:

• An effective $0 deductible, so the plan helps from the first visit.
• Simple copays shown before a visit, capped by a low out-of-pocket maximum.
• A broad national PPO network, plus providers we contract with directly.
• 24/7 physician-led care navigation: a care team that finds the right provider, books appointments and explains costs up front.

What your company gets: one monthly cost set in your quote, usually 10–20% below comparable fully insured coverage and fixed before the plan starts, with no admin fees. You keep your payroll provider, and the plan can start mid-year.