The 7 best health insurance providers for small businesses in 2025

Managing business health insurance—especially as a busy small business owner striving to support your employees—is a big job. Between weighing premiums, understanding health insurance plans, comparing health coverage details, and staying compliant with the Affordable Care Act, there’s a lot to take in.

The good news is that numerous health insurance providers specialize in meeting the needs of small businesses, offering robust health benefits at (often) affordable rates. Below, we’ve compiled a guide to choosing the best health insurance provider for small businesses in 2025, along with a breakdown of how business health insurance works, key types of health plans, and critical steps for picking the right one to meet your employees’ needs.

How small business health insurance works

Business health insurance typically means that an employer purchases a group health insurance policy for their full time employees (and sometimes for part-timers too, depending on health insurance providers and policy rules).

Under many health insurance plans, employees and employers split the premiums, and deductibles or copays may apply whenever employees receive care. Some health insurance providers offer access to a wide provider network, while others limit which doctors or hospitals your employees can see.

One cornerstone of small business coverage is compliance with the Affordable Care Act (ACA). Depending on how many full time employees you have, you may be required to provide certain health benefits. Small businesses aren’t always required to provide plans—the ACA compels businesses with 50 or more full-time or full-time equivalent employees to offer qualifying healthcare coverage. 

But even if it isn’t required by law, offering employees access to affordable, comprehensive health coverage can help your small business or startup attract and retain the best talent. Overall, business health insurance gives employees peace of mind while helping your small business stay competitive. And according to the Kaiser Family Foundation, group policies are often less expensive per person than individual health insurance coverage.

3 types of small business health insurance

Many small businesses explore multiple health insurance options before deciding on a final policy. A popular route to explore your options is the Small Business Health Options Program (SHOP), a government-supported marketplace for employers who want to enroll in group health insurance that’s ACA-compliant. Whether you choose to use SHOP or not, here are some core types of health plans you may encounter:

HMO (Health Maintenance Organization)

A health maintenance organization, or HMO, is known for lower premiums but often restricts you to a specific provider network and requires a referral from your primary care doctor. Employees usually enjoy lower out of pocket expenses, but have fewer health options for doctors and specialists.

EPO (Exclusive Provider Organization)

An exclusive provider organization, or EPO, generally won’t cover care outside of its provider network, except in emergencies. However, unlike an HMO, you may not need referrals from a primary care provider. EPOs can be a middle ground for small business employers wanting comprehensive coverage without paying the highest premiums.

PPO

A preferred provider organization, or PPO, offers the most flexibility. Your employees can visit doctors in-network or out-of-network, but they’ll likely pay higher copays, coinsurance, or deductibles if they go outside the plan’s preferred providers. PPOs often have higher premiums but can be ideal if your workforce values broader health care access.

Small business health insurance costs

When choosing among HMO, PPO, EPO, and other structures, employers should understand how premiums and out-of-pocket expenses stack up, both for your small business and for your employees. Here’s a breakdown of typical costs for different types of health insurance plans:

HMO costs

• Premiums: Often on the lower side, making this a budget-friendly choice. However, this reflects that provider networks tend to be more limited with HMOs.
• Deductibles and copays: Tends to have predictable out-of-pocket fees with fewer unexpected billing surprises when care is received in-network. But employees may pay more if they go out of network (or find they simply can’t without covering the entire expense).

PPO costs

• Premiums: Generally higher, reflecting the added freedom to see both in-network and out-of-network providers
• Deductibles: Can vary widely; some small businesses opt for higher deductibles to lower monthly premiums
• Copays or coinsurance: Usually moderate in-network, but can climb significantly out-of-network

EPO costs

• Premiums: Often land between HMO and PPO rates
• Out-of-pocket costs: EPOs can be more flexible than HMOs (for example, they don’t require referrals from primary care physicians to see specialists), but they still restrict coverage to in-network care. This helps contain costs. Networks can be smaller than PPOs but employees who prefer a moderate premium and direct specialist access might find an EPO appealing for the balance.

Hybrid or POS plan costs

• Premiums: Often align with HMO and PPO elements, but plan design can vary significantly
• Out-of-pocket costs: These can strike a balance between cost and choice, but be sure to look at how deductibles, copays, and network restrictions are structured.

Additional costs for small business health insurance

In addition to the cost for coverage, small businesses can incur other expenses related to offering healthcare, such as:

• ACA compliance costs: If you fall under certain rules, you must meet coverage standards under the ACA. Failure to do so may result in penalties.
• Taxes and credits: Some small businesses may qualify for tax credits if they use the SHOP marketplace and meet certain requirements on wages and full time employees.
• Administrative fees: Working with brokers or third parties sometimes adds overhead, but can save time and potential claim disputes down the line.

How to choose the right small business health insurance

Selecting the right business health insurance plan requires assessing your unique needs, comparing health insurance providers, and understanding health insurance costs. Here’s a straightforward guide:

Step 1. Assess your business and employee needs

Start with how many employees you have, their average health status, and whether you offer coverage for full time employees only or a broader group. Look into any known health benefits they value—like mental wellness—because you may want to prioritize plans that offer specific benefits that are important to your workforce.

Step 2. Compare plan types and coverage options

Decide which approach—health maintenance organization, preferred provider organization, or other plan—best suits your workforce. Think about copays, deductibles, coinsurance, and whether your employees want specific doctors or flexibility in their health care providers.

Step 3. Evaluate costs beyond premiums

While monthly premiums matter, don’t forget health insurance premiums aren’t the only expense. Factor in out of pocket costs like copays, coinsurance, and deductibles. Also look into whether any health reimbursement arrangement or other cost-sharing method can help you keep coverage affordable for your employees.

Step 4. Ensure compliance and customer support

Check the ACA guidelines for small businesses—especially if you have 50 or more full-time employees. Look for health insurance providers with strong customer support or an assigned broker who can help you enroll and address any issues. The Affordable Care Act sets standards that you’ll likely need to follow, and your insurance rep or broker should help guide you on staying compliant.

3 key aspects to compare small business health insurance plans

For your final shortlist of health insurance providers, pay close attention to these crucial factors:

Coverage options and network access

Look for broad provider networks that your employees can realistically use. If your team needs specialized care or sees certain doctors, confirm those professionals are covered.

Cost structure (premiums, deductibles, and copays)

Health insurance costs aren’t just about monthly premiums. Consider the deductibles, copays, coinsurance, and other costs. A plan with lower premiums might have higher out-of-pocket expenses, making it less affordable long-term.

Compliance and tax benefits

Many small businesses can qualify for tax credits through programs like SHOP. According to the Kaiser Family Foundation, group health plans that meet certain ACA standards might reduce overall costs for employers—and for employees.

What is the best health insurance for small business owners?

There’s no single “best” plan for every small business or every group of employees. 

Like all small business benefits decisions, selecting the right policy depends largely on your company’s unique makeup and needs. Factors like employee demographics, the size of your workforce, and whether you serve multiple states all play a role. Generally, an optimal plan balances:

• The breadth of coverage it offers: Make sure your employees can see needed specialists or get quality care without excessive referrals or restrictions.
• Cost controls: Offer premiums within your budget and predictable out-of-pocket limits (e.g., deductibles, copays, coinsurance) that employees can manage.
• Administrative ease: Look for robust digital tools, simple claim filing, and reliable customer service. This helps keep your HR processes smooth.
• Flexibility: The best plans will offer options for employees who want minimal out-of-pocket expenses, as well as those who prefer a broader network even if it costs slightly more in premiums.
• Wellness and other additional benefits: Many businesses appreciate add-ons like mental health services, telemedicine, or health savings account (HSA) capabilities—particularly if they align with your workforce’s priorities.

Ultimately, the best health insurance for small business owners is the one that aligns with your budget, addresses employee needs for coverage, and meets any regulatory obligations in your region. Before you commit, weigh the balance between coverage perks (like out-of-network freedom) and the direct impact on premiums and deductibles. This ensures you secure a plan that genuinely supports both your people and your business health objectives.

Easily manage employee health insurance and other benefits with Rippling

Looking for access to the best small business health insurance—and software that makes benefits selection and management easier and more streamlined than ever? You need Rippling.

Rippling's benefits administration software consolidates all your benefits into one system, automating enrollment, deductions, and administration.

And with Rippling PEO software, you can access big-company benefits, including Fortune 500-caliber medical, dental, and vision benefits, pay-as-you-go workers’ compensation plans, EPLI coverage, HSA, FSA, and more—likely for less than you’re paying now. Your employees will also get free access to concierge, on-demand benefit navigation services via Rightway to help them pick benefit plans, schedule appointments, understand bills, find in-network providers, and more.

Plus, with Rippling, you get a whole host of other features and benefits, including:

• HR, IT, and Finance in one platform
• Powerful and customizable reporting on any employee data
• Remote team management features, including state and local tax registration, digital onboarding, and app and device management
• Access to top-notch benefits plans with below-average, predictable renewal rates
• Automatic flagging for potential federal, state, and local compliance infractions, along with recommended action plans 
• Automated processes, including ACA and COBRA administration, anti-harassment training, and distributing digital labor law posters to your employees
• Access to hundreds of comprehensive HR resources, guides, and templates

Best small business health insurance FAQs

What are the best healthcare plans for mid-size businesses?

Mid-size organizations generally need to weigh the same factors as small businesses: coverage needs, provider networks, and premiums and other costs. Many health insurance providers that support small businesses offer group health plans for mid-sized employers as well.

How much does small business health insurance cost?

Business health insurance expenses vary depending on the number of employees, the chosen health insurance coverage, premiums, and your group health plan type. Employers often share costs with their employees, splitting premiums and occasionally other costs, like deductibles or coinsurance. Seeking quotes from multiple health insurance companies or working with a broker can help you find more affordable deals on business health insurance.

Is $200 a month a lot for health insurance?

Paying $200 monthly in premiums could be considered affordable in some regions, especially if copays and deductibles remain reasonable. However, everything depends on the coverage level, your provider network, and how the plan handles out of pocket expenses. For some employees, $200 might be a bargain, while others may feel it’s steep if the health plan offers limited benefits.

Where do you find small business health insurance options?

A PEO like Rippling is a great place to get access to Fortune 500-level health insurance at affordable prices. Small business owners often visit the SHOP marketplace to enroll in ACA-compliant group health insurance or connect with a reputable broker for custom quotes. Many health insurance providers also have online portals and dedicated support lines for employers seeking medical plans, health reimbursement arrangements, and related health benefits.

This blog is based on information available to Rippling as of March 27, 2025.

Disclaimer: Rippling and its affiliates do not provide tax, accounting, or legal advice. This material has been prepared for informational purposes only, and is not intended to provide or be relied on for tax, accounting, or legal advice. You should consult your own tax, accounting, and legal advisors before engaging in any related activities or transactions.