Introduction
Running a tiny business is hard enough without worrying about healthcare.
Maybe it’s just you and one employee. Or maybe you and your partner finally launched that shop you dreamed about.
You want to offer insurance. You know it’s the right thing to do. You know it helps you keep good people.
But when you Google it, all you see are plans for big corporations with 50+ staff. You feel stuck in the middle—too big to ignore it, but too small to afford it.
Here is the truth: You are not too small.
The insurance world has actually changed a lot. There are specific ways for 2-person teams to get coverage without going bankrupt.
This guide isn’t about boring policy details. It’s a strategy guide. Here is how to get covered without losing your mind.
1. Start with the Government (SHOP)
The government built a special marketplace just for small businesses. It’s called SHOP (Small Business Health Options Program).
- Who is it for? Anyone with 1 to 50 employees. Yes, even a team of two counts.
- Why bother? One reason: Free Money.
If you use SHOP, you might get the Small Business Health Care Tax Credit. This credit can pay for up to 50% of the premiums you buy for your staff.
- The Catch: You have to pay at least half of their premium yourself, and their average salary needs to be under $56,000.
Is this for you?
If you run a cafe, a retail store, or any business with lower-wage employees, this is usually the cheapest option.
2. Group Insurance (You Can Get It!)
Most people think, “I can’t get a group plan, I’m too small.”
Wrong.
Big insurers like Blue Cross or United often have small group plans for teams as small as one non-owner employee.
- The Rule: You usually need at least one person on payroll who isn’t your spouse or a business partner.
- The Perk: These plans often have better doctor networks than the plans you buy as an individual. Plus, the premiums are a tax write-off for the business.
How it works:
You pick a base plan. You pay half the cost. Your employee pays the other half straight from their paycheck (pre-tax). It looks professional, and it saves everyone money on taxes.
3. The “Hands-Off” Method (QSEHRA)
What if you don’t want to pick a plan? What if you don’t want to deal with insurance agents?
You can use a QSEHRA (Qualified Small Employer Health Reimbursement Arrangement).
It’s a mouthful to say, but it’s simple to do.
- You set a budget. (Example: “I’ll give you $300 a month for health.”)
- Your employee buys their own plan on Healthcare.gov.
- They show you the receipt.
- You pay them back $300 tax-free.
Why it wins:
You don’t have to manage a policy. You just manage the cash.
4. The “Spouse” Problem
This is a common issue. If the “2 employees” are just you and your husband or wife, the rules are different.
In most states, a business owned by a married couple with no other staff cannot buy a Group Plan. You are seen as a Sole Proprietorship.
The Fix:
You will likely need an Individual Family Plan from the Marketplace.
- Silver Lining: Depending on your income, you might get subsidies that make this cheaper than a group plan anyway.
5. Join Forces (PEOs)
If you have 2 employees but want the perks of a 500-person company, look at a PEO (Professional Employer Organisation).
Companies like Gusto or Justworks do this.
- The Concept: You technically “lease” your employees to them. Because they group all their clients, they have thousands of people in their pool. That gives them the buying power to get huge insurance discounts.
- The Cost: You pay a monthly admin fee, but the savings on premiums often pay for it.
The Verdict
Buying insurance for a tiny team feels scary because the price tag looks big. But you aren’t just spending money; you are buying stability.
- Want tax credits? Check SHOP.
- Want flexibility? Set up a QSEHRA.
- Want better doctors? Get a Small Group Plan.
Don’t guess. Call a local broker (it’s free). They can run the numbers for your zip code in five minutes.
Your business is small, but your people matter. Protect them.
FAQ
How much does this actually cost?
Expect to pay about $400 to $600 per person, per month. But remember, if you split that 50/50 with the employee, your cost is closer to $250.
Do I have to offer insurance?
No. If you have fewer than 50 employees, the law says you don’t have to offer anything. No penalties. You do it because you want to, not because you have to.
Can I just give them a raise instead?
You can, but the government will tax it. If you give them $500 extra, they lose a chunk to income tax. If you use a QSEHRA, that $500 is tax-free for both of you.
Can I pick who gets it?
Generally, no. You can’t just give insurance to your favourite employee. If you offer it to full-time staff, you have to offer it to all eligible full-time staff.
links:-
- https://www.youtube.com/shorts/CTCPaODI6nU
- Smart Telematics Car Insurance That Cuts Your Premium Fast
Disclaimer
I write about business, but I’m not an insurance broker. Laws change fast. Always talk to a licensed pro before you sign anything