Companies with a handful of people — two employees, five, ten — are the core of the small-group market, and they are a core client for Ares Benefit Group. The product menu is the same menu described on the small-business group health page. What changes at this size is not the existence of a market; it is the participation, contribution, and "who counts as an employee" rules that decide whether a given product can be issued.
This page is for employers who searched for coverage at a specific headcount. The answer is a set of structures, not a single plan named after the number two, five, or ten.
What it is
Federal law generally treats a small employer as one that employed an average of at least 1 but not more than 50 employees during the preceding calendar year, with a state option to use 1 to 100. That definition, and the states that have notified CMS of an expansion, are discussed on the small-business group health page. Florida uses the 50-employee federal default. A company of 2, 5, or 10 employees sits inside that market in Florida and in every other state that uses the federal default or the 100-employee option.
A fully insured small-group plan, including a SHOP plan, is a group policy. A level-funded plan may also be available, depending on the issuer and the state. A defined contribution arrangement — an ICHRA or, if you offer no group health plan, a QSEHRA — is often part of the same conversation at this size.
SHOP has a specific employee test. HealthCare.gov states that to qualify, you must have at least one full-time equivalent employee other than owners, spouses, and family members of owners, and partners. A business made up only of the owner, the owner's spouse, family members, or partners does not qualify for SHOP. Off-SHOP small-group issuers can have their own eligibility conditions, which we will check rather than invent.
Who it fits
This page is written for employers who already have, or are about to have, two to ten people on the census. If those people include common-law employees who are not owners or family members, a group policy and SHOP are usually in the conversation. If the census is mostly owners and family, an HRA or individual coverage may be the cleaner path; see group health insurance for an LLC and family business group health.
Ares is built for companies from 2 employees to large groups. We will tell you whether a given product can be issued for your census rather than assume that every 2-employee group is identical.
How it works for employers
You send a roster that identifies owners, partners, family members, and common-law employees, the states where people work, and what you offer today. We confirm the small-group definition that applies, check SHOP and issuer eligibility, and compare a group policy, a level-funded plan where one can be issued, and an ICHRA or a QSEHRA. If the Small Business Health Care Tax Credit may apply — generally, eligible employers with fewer than 25 full-time equivalent employees, through SHOP — we will flag it for your tax advisor.
Participation and contribution rules are set by state law and by the issuer, not by a single federal percentage, except where a program such as SHOP publishes its own test. HealthCare.gov generally uses a 70 percent SHOP participation test, with some states setting a different rate, and it states there is no contribution requirement merely to offer SHOP coverage. If a small group cannot meet applicable contribution or participation rules, federal regulations allow an issuer to restrict enrollment to November 15 through December 15.
How it compares
At two employees, at five, and at ten, the same four structures are usually on the table: a fully insured small-group plan, SHOP, a level-funded plan where available, and a defined-contribution HRA. Which of them can be issued depends on who is on the census, not on the headline number. We will not describe a 10-employee group as automatically cheaper to insure than a 2-employee group, and we will not publish a typical premium.
To get a proposal built around your actual roster, request a proposal or call (813) 540-1299. Our agents are licensed in all 50 states. The firm is based in Tampa and works with Tampa Bay employers as well as companies in other states. See also the group plan options page.Frequently asked questions
Can a company with two employees get a group health plan?
Often yes, in the small-group market, when issuer and state rules are met. SHOP requires at least one full-time equivalent employee who is not an owner, a spouse or family member of an owner, or a partner. We will check both paths, and an ICHRA or a QSEHRA, against your roster.
Is the rule different at five employees or at ten?
The federal small-group definition is the same. Participation may be easier to meet as the census grows, but that is an issuer- and state-specific fact, not a number we will invent. The structures we compare are the same.
Do owners count as employees?
For some tests yes, for others no. SHOP's one-employee test excludes owners, their spouses and family members, and partners. Tax and cafeteria-plan rules also treat certain owners differently, as explained on the LLC page. The roster has to identify each person.
Can we buy coverage mid-year?
Generally yes, in the group market. If contribution or participation rules are not met, an issuer may limit enrollment to November 15 through December 15.
Do we have to offer coverage at this size?
Not under the ACA employer shared-responsibility rules, which apply to applicable large employers. Many companies with 2 to 10 employees still offer coverage, or a defined contribution, as a hiring decision. See the coverage-requirement page.
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