If no plans are available, you may be able to get health coverage one of these ways:

If you're getting help completing this application from a professional, select the type from this list:

• Navigator
• Certified application counselor
• In-person assistance personnel
• Agent or broker
• None of these

See below for more information about each type of professional who can help you with your application.

Entering this information will help the U.S. Department of Health and Human Services (HHS) better understand and improve the health and health care for all Americans. Providing this information won’t impact your eligibility for health coverage, your health plan options, or your costs in any way.

Offering health coverage is a major decision for your business. When looking for a plan that fits the needs of your business and employees, you should carefully consider things like the cost to you and your employees, and the health services covered.

For a basic guide on some health insurance products and services that may be available to small businesses, check out these resources. You can also contact a licensed agent or broker for more help.

Note: Business owners with no employees can use the Marketplace for individuals and families to enroll in a health plan that best fits their needs. Learn more about coverage options for self-employed individuals here.

Group health insurance coverage

A group health insurance plan, like a plan purchased through the Small Business Health Options Program (SHOP) or otherwise from a private insurance company, provides coverage to eligible employees. Business owners can offer their employees one plan or a selection of plans to choose from.

Small employers (generally those with 1-50 employees) may be eligible to purchase coverage through SHOP.

Enrolling in a SHOP plan is generally the only way for an eligible small employer, including non-profits, to claim the Small Business Health Care Tax Credit.

• Learn more about purchasing insurance through SHOP
• See SHOP plans and prices
• How the Affordable Care Act (ACA) affects small businesses

If there are no SHOP plans available in your area, or your business is a large employer, you can work with an insurance company or licensed agent or broker to find out what group plans may be available to you, or learn more using the resources below.

Health reimbursement arrangements

Health reimbursement arrangements (HRAs) are a type of group health plan. HRAs allow employers to help their employees pay for medical expenses, including premiums for individual coverage in some cases.

Health Savings Accounts and other tax-favored health plans

There are various health plans that are designed to give individuals tax advantages to offset health care costs. These include: Health Savings Accounts (HSAs), Health Flexible Spending Arrangements (FSAs), and Health Reimbursement Arrangements (HRAs).

For more details on tax-favored health plans, refer to IRS Publication 969.

Wondering if traditional group coverage—like a plan offered through the Small Business Health Options Program (SHOP)—or a Health Reimbursement Arrangement (HRA) is right for your small business? Understanding eligibility requirements, coverage options, and costs can help you decide which option fits the needs of your small business and employees.

The difference between certain types of HRAs and traditional group coverage

What's an excepted benefit HRA?

If you offer group coverage, you may be able to help reimburse your employees for certain health benefits up to an annual maximum of $1,950 in 2023 (adjusted annually for inflation), like vision or dental coverage, coinsurance and copayments for individual coverage, short-term health insurance, or other health care costs. This type of HRA isn’t allowed to reimburse premiums for individual coverage, traditional group health plans (other than COBRA or other continuation coverage), or Medicare. Review frequently asked questions about HRAs for individual coverage and excepted benefits (PDF, 408 KB).

Employees: Understanding HRAs

• QSEHRA
• Individual coverage HRA
• Determine your next steps with help from the HRA affordability tool

The individual coverage Health Reimbursement Arrangement (HRA) is an alternative to offering a traditional group health plan to your employees. It’s a specific account-based health plan that allows employers to provide defined non-taxed reimbursements to employees for qualified medical expenses, including monthly premiums and out-of-pocket costs, like copayments and deductibles. Employees must be enrolled in individual health insurance coverage (like a plan they bought through the Marketplace) to use the funds.

Can I offer an individual coverage HRA?

Generally, employers of any size can offer an individual coverage HRA, as long as they have one employee who isn’t a self-employed owner or the spouse of a self-employed owner. HRAs are only for employees, not self-employed individuals.

Will I qualify for the Small Business Health Care Tax Credit?

Enrolling in Small Business Health Options Program (SHOP) coverage is generally the only way to qualify for the Small Business Health Care Tax Credit, which can save you up to 50% of your employer contribution for 2 consecutive years. Learn more about offering traditional group coverage SHOP plans to your employees.

How much can I contribute to my employees’ costs?

You have the flexibility to decide how much you contribute toward your employees’ individual coverage HRA for each 12-month plan year. There are no annual minimum or maximum contribution requirements.

What’s considered an “affordable” individual coverage HRA offer?

An individual coverage HRA is considered affordable for an employee and their dependents if the monthly premium the employee would pay (after the employer’s reimbursement) for the self-only, lowest cost Silver plan available to them through the Marketplace in their area is less than 9.12% of 1/12 of the employee’s yearly household income.

• If your offer is considered affordable: The employee won’t be eligible for the premium tax credit for the employee’s Marketplace coverage or the coverage of other household members who would be covered by the individual coverage HRA.
• If your offer isn’t considered affordable: If they’re otherwise eligible the employee must decline the individual coverage HRA to claim the premium tax credit for the Marketplace coverage. The employee can’t combine the individual coverage HRA with a premium tax credit.

Note: Affordability calculations for employer-sponsored coverage, including an individual coverage HRA offer, aren’t affected by savings and lower costs on Marketplace health insurance coverage that the American Rescue Plan Act of 2021 provides.

How is “affordability” determined?

If applying for coverage through HealthCare.gov, employees will provide information about their individual coverage HRA offer when completing an application for Marketplace coverage, including the HRA’s start date and their employer's contribution amount. The Marketplace will determine if the offer meets requirements for “affordability,” which will help determine an employee’s eligibility for the premium tax credit. Prior to submitting a Marketplace application, employees can also use the HRA affordability tool for an estimate of their individual coverage HRA’s affordability.

Can my employees use pre-tax dollars to pay the portion of the health plan premiums not covered by an individual coverage HRA?

Yes. You may use a salary reduction arrangement under a cafeteria plan to allow your employees to pay on a pre-tax basis the portion of the individual health insurance premiums not covered by your individual coverage HRA. However, your employees can’t use these pre-tax payments to pay for Marketplace coverage. They can still use the individual coverage HRA to buy individual health insurance coverage, but they’ll need to purchase coverage outside of the Marketplace to pay the portion of their health plan premiums not covered by the individual coverage HRA.

Which employees are eligible for my individual coverage HRA offer?

You can offer an individual coverage HRA to any eligible employee, or you can offer it only to certain types of your employees. The types or classes of employees can be determined by certain job-based criteria, like:

• Full-time, part-time, or seasonal status
• Employees covered by a collective bargaining agreement
• Salaried or non-salaried (like hourly workers) employees
• Employees who haven't satisfied a waiting period
• Non-resident aliens with no U.S.-based income
• Employee work locations
• Any combination of 2 or more employee types listed above

The individual coverage HRA rules specify the classes. You can't make up your own classes. See a full list of available classes (PDF, 408 KB). The reimbursement amount you offer can also vary within each employee class based on age (not to exceed a 3:1 ratio) or number of dependents, and you can set a waiting period for new employees. There's also a special rule for new hires. Otherwise, you must offer the individual coverage HRA on the same terms to all employees in a class.

Can I offer an individual coverage HRA along with traditional group coverage?

You can offer certain types of employees a traditional group health plan and other types of employees an individual coverage HRA. But you can’t offer the same type of employees a choice between a traditional group health plan and an individual coverage HRA, and you can’t combine an individual coverage HRA with a traditional group health plan or with SHOP coverage. For example, you can offer full-time employees a traditional group health plan and offer part-time employees an individual coverage HRA.

There are certain requirements if you offer an individual coverage HRA to one type of employee and traditional group health plan coverage to another type of employee. If you offer an individual coverage HRA only to certain employees, in some cases, there are size requirements for certain classes of employees that get an individual coverage HRA offer:

If you don't offer a traditional group health plan to any of your employees, these class size minimums don’t apply.

How to start an individual coverage HRA

You can set up an individual coverage HRA at any time. You’ll need to provide a written notice to your new employees as soon as they’re eligible to participate and to current employees 90 days before the beginning of each plan year.

Employees will need information from this notice to fill out a Marketplace application and check eligibility for a premium tax credit on a Marketplace health plan, or free or low-cost coverage through Medicaid or the Children's Health Insurance Program (CHIP). They must be offered the chance to decline the individual coverage HRA annually before the plan year begins, or when they’re first offered the individual coverage HRA if that happens in the middle of the plan year.

See a sample HRA notice to learn what information employers must include. (PDF, 93 KB).

Remember, to use their individual coverage HRA amount, employees must be enrolled in individual health insurance coverage, like a plan purchased through the Marketplace or from a private insurance company, or have Medicare coverage (Part A and Part B, or Part C). Short-term plans, or other limited benefits coverage, like dental or vision insurance, don’t meet this requirement (PDF, 408 KB). There must be reasonable procedures in place (PDF, 70 KB) to confirm that employees and their households covered by the individual coverage HRA are enrolled in individual health insurance coverage.

You should consider how your employees can get individual health insurance coverage when picking a start date for your individual coverage HRA’s plan year. For example, offering an individual coverage HRA starting on January 1 allows employees to choose coverage during the individual market’s annual Open Enrollment Period, and in most cases, individual market plan deductibles reset on January 1 each year. If you’re ending a traditional group health plan to offer an individual coverage HRA, a class of employees is offered a new individual coverage HRA, or a newly-hired employee becomes eligible for the individual coverage HRA during its plan year, your employees may qualify for a Special Enrollment Period to newly enroll in individual health insurance coverage. To enroll in or change their Marketplace coverage through this Special Enrollment Period, employees can submit an application on HealthCare.gov and include information about when their HRA can start.

Generally, employees will need to submit an application and select a plan in time for it to take effect by the first day that their individual coverage HRA can start.

Need help deciding whether an individual coverage HRA is right for your business?

Search for a registered agent/broker or trained assister in your area. You may also want to talk with a licensed tax professional or benefits specialist.

Compare coverage options with our HRA decision guide. Find out more about how an individual coverage HRA compares to other products and services that may be available to help you cover your employees.

Employees: Understanding individual coverage HRAs

If you’re an employee who has been offered an individual coverage HRA by your employer, learn more about individual coverage HRAs and the Marketplace.

• Determine your next steps with help from HealthCare.gov’s HRA affordability tool.

Certain small employers—generally those with less than 50 employees that don’t offer a group health plan—can contribute to their employees’ health care costs through a Qualified Small Employer Health Reimbursement Arrangement (QSEHRA).

A QSEHRA allows small employers to provide non-taxed reimbursement of certain health care expenses, like health insurance premiums and coinsurance, to employees who maintain minimum essential coverage, including an individual Marketplace plan. In many states, QSEHRAs allow small employers to provide their employees additional plan choices without managing group health plan coverage.

Note: A QSEHRA isn’t a traditional group health plan. For small businesses interested in offering traditional group coverage, find out if SHOP is available in your state. Enrolling in SHOP is generally the only way to qualify for the Small Business Health Care Tax Credit, which can save eligible employers up to 50% of their employer contribution for 2 consecutive years.

QSEHRA contributions

With a QSEHRA, small employers can decide what they'll contribute to their employees’ health care costs, up to an annual maximum that is set by the IRS. Employees pay their provider or insurance company for their health care costs, then submit proof of payment to be reimbursed by the QSEHRA. Reimbursement is tax-free. If an employee doesn’t submit a claim, the employer keeps the money, though they may choose to roll it over from year to year while the employee is still employed by the business. Typically, QSEHRA amounts claimed by employees are paid monthly by their employer.

Generally, the QSEHRA amount you provide to your employees will affect the amount of premium tax credit your employees are eligible for with their Marketplace coverage. If you provide the QSEHRA to employees’ dependents, then it will affect the dependent’s premium tax credit eligibility, as well. They may be eligible for some or no tax credit depending on the QSEHRA amount you provide. Visit the IRS website to find out more about QSEHRA rules.

How to start a QSEHRA

Small employers can set up a QSEHRA at any time. To provide a QSEHRA you’ll need to give written notice to your new employees as soon as they’re eligible to participate and 90 days before the beginning of each plan year for current employees. This notice is required to include certain information–to learn more about what this notice must include, review IRS Notice 2017-67 (PDF, 211 KB). Note: Employees must have qualifying health coverage to use their QSEHRA amount.

You may want to consider how your employees can get qualifying health coverage when picking a start date. For example, providing a QSEHRA starting on January 1 allows employees to choose coverage during the individual market’s annual Open Enrollment Period, and in most cases, plan deductibles reset on January 1 each year. If you’re newly providing a QSEHRA, your employees may qualify for a Special Enrollment Period. Newly hired employees who gain access to the QSEHRA may also qualify for a Special Enrollment Period to enroll in or change individual health insurance coverage outside of Open Enrollment. To enroll in coverage through this Special Enrollment Period, employees can submit an application on HealthCare.gov and include information about when their HRA can start.

Get help: Talk to a licensed tax professional, benefits specialist, or health insurance agent/broker to find out if group coverage or QSEHRAs are right for your small business.

Exploring coverage options?

Compare QSEHRAs to other products and services that may be available to help you cover your employees.

Take me to the HRA decision guide

Employees: Understanding QSEHRAs

If you’re an employee who has been provided a QSEHRA by your employer, learn more about QSEHRAs and the Marketplace.

• Determine your next steps with help from our HRA affordability tool
• Use this worksheet to help determine if your QSEHRA offer is affordable (PDF, 147 KB)

Generally, if you run your own business and have no employees, or are self-employed, your business won’t qualify for group coverage. You can purchase qualified health coverage through the Marketplace for individuals and families.

With an Individual Marketplace plan, you can:

• Find coverage for yourself and your family
• Access premium tax credits and other savings, if you qualify

The Individual Marketplace

The Individual Marketplace offers flexible, quality coverage for people who:

• Run their own businesses
• Are self-employed with no employees
• Work as freelancers or consultants

All plans in the Marketplace cover the same categories of essential health benefits and are prohibited from excluding treatment based on pre-existing conditions. You can also choose between plans with lower premiums and higher cost-sharing when you need care, or higher monthly payments and lower cost-sharing when you need care.

You can only enroll in Marketplace coverage during the annual Open Enrollment Period, unless you have a qualifying life event during the year.

Looking for help with coverage? Find an agent or broker in your area. Agents and brokers are experts in health insurance and can help you find the coverage you need if they have completed registration with the Marketplace, generally at no extra cost to you.

Qualifying for Marketplace savings

To get a premium tax credit or reduction of your out-of-pocket costs, you’ll need to provide an estimate of your household income to the Marketplace for the year you’re getting coverage. This can be challenging for business owners whose income may vary. You should provide your best estimate. Talk to your tax professional for advice on how to estimate your household income.

If you qualify for a premium tax credit and/or reduction of your out-of-pocket costs and your expected household income changes during the year, you should return to the Marketplace and update your estimated income as soon as possible. At the end of the year, if you make more than what you reported to the Marketplace, you may have to pay back some or all of the premium tax credits that you received in advance. If you make less, you could get additional premium tax credits when you file your taxes.

Learn more about reporting income to the Marketplace.

Note: You may be able to get more savings and lower costs on Marketplace health insurance coverage due to the American Rescue Plan Act of 2021. Find out if you qualify for Marketplace savings.

The Affordable Care Act (sometimes called the health care law, or ACA) established the Small Business Health Options Program (SHOP) for small employers (generally those with 1–50 full-time and full-time equivalent employees (FTEs)) who want to provide health and dental coverage to their employees.

Certain employers can enroll in SHOP through private insurance companies, or with the help of a SHOP-registered agent or broker. SHOP plans are generally the only way to qualify for the Small Business Health Care Tax Credit to lower premium costs.

But other parts of the health care law may also affect employers.

Required reporting about the Marketplace to your employees

Certain employers are required to provide certain information about the Marketplace to their employees, whether they offer health insurance or not.

90-day maximum waiting period

If you offer health insurance to your employees, you must offer it to all eligible employees when they become eligible for health coverage. Learn about the 90-day waiting period from the IRS (PDF, 40.4 KB).

Summary of Benefits and Coverage (SBC) disclosure rules

Employers must provide employees with a standard "Summary of Benefits and Coverage" (SBC) form explaining what their health plan covers and what it costs. The purpose of the SBC is to help employees understand their health insurance options. You could face a penalty for non-compliance. Get details about SBCs and see a sample completed form.

Flexible Spending Accounts (FSAs)

Employees can't contribute more than the annual dollar limit set by the IRS to their Flexible Spending Accounts. That limit doesn't apply to employer contributions to the employees' FSAs. Employers have 2 options to let employees carry over unspent FSA funds into the following plan year. Get more information from the IRS (PDF, 1.2 MB).

Workplace wellness programs

The Affordable Care Act creates incentives to promote employer wellness programs and other activities that support healthier workplaces. The maximum reward to employers using a wellness program that's contingent on employee health has increased from 20% to 30% of the cost of health coverage. The maximum reward for programs designed to prevent or reduce tobacco use is 50%. Learn more about wellness incentives from the Department of Labor.

Employer Shared Responsibility Payment

Certain businesses with 50 or more full-time and full-time equivalent employees that don't offer insurance that meets certain minimum standards may be subject to the payment. Get details about the Employer Shared Responsibility Payment from the IRS.

Reporting information on health coverage by employers and insurance companies

The health care law requires the following organizations and some other parties to report that they provide health coverage to their employees:

• Certain employers, generally those with 50 or more full-time and full-time equivalent employees
• Health insurance companies
• Self-insuring employers of any size

Learn more about these reporting requirements from the IRS.

Medical Loss Ratio rebates

Insurance companies must generally spend at least 80% of premium dollars on medical care. Insurance companies that don't meet this requirement must provide rebates to policyholders — usually an employer who provides a group health plan. Employers who get these premium rebates must allocate the rebate properly. Get more details about federal tax treatment of Medical Loss Ratio rebates from the IRS.

If you already offer health insurance to your employees

If you offer health insurance to your employees that is not through SHOP, you can keep the coverage you have. In general, offering a SHOP plan is the only way to qualify for the Small Business Health Care Tax Credit.

IRS resources for small businesses

The IRS offers several resources to help employers:

• "Affordable Care Act: What employers need to know (PDF)"
• Guide to tax provisions of the Affordable Care Act for employers
• Health care questions and answers for employers

More resources for small businesses

There are many health insurance products and services that are available for small businesses and their employees. Learn more about other health insurance products and services that may be available.

Find the right SHOP health insurance plan for your employees

You may qualify for the Small Business Health Care Tax Credit that could be worth up to 50% of the costs you pay for your employees' premiums (35% for non-profit employers).

See if you qualify for savings

Enrolling in a Small Business Health Options Program (SHOP) plan is generally the only way for a small business or non-profit to claim the Small Business Health Care Tax Credit. To qualify for the tax credit, all of the following must apply:

• You have fewer than 25 full-time equivalent (FTE) employees
• Your average employee salary is about $56,000 per year or less
• You pay at least 50% of your full-time employees' premium costs
• You offer SHOP coverage to all of your full-time employees. (You don't have to offer it to dependents or employees working fewer than 30 hours per week to qualify for the tax credit.)

TAKE ME TO THE TAX CREDIT ESTIMATOR

Higher benefits for smaller businesses

The tax credit is highest for companies with fewer than 10 employees who are paid an average of $27,000 or less. The smaller the business, the bigger the credit.

Questions?

• See all SHOP tools, calculators, fact sheets, how-to guides, videos, and other resources for employers.
• Contact the SHOP Call Center at 1-800-706-7893 (TTY: 1-888-201-6445).
• The Internal Revenue Service has more information about the Small Business Health Care Tax Credit.

More answers: The Small Business Health Care Tax Credit

If you operate a business with employees in more than one state

You'll enroll in a Small Business Health Options Program (SHOP) plan in the state where your primary business site is located.

You can offer your employees SHOP coverage 2 ways:

Option 1: Choose a single health plan for all employees. Be sure to choose a plan with a multi-state or national provider network. Offer it to all full-time employees in each business location.

• If you choose this option, employees in all of your business locations will be counted when calculating your minimum participation rate and eligibility determination.

Option 2: Offer different SHOP plans in each state where your employees work. As long as your business meets all requirements to participate in the state's SHOP, you can offer coverage even if you have just one employee in a location. You'll still need to offer coverage to all your full-time employees in each state.

• The employees on each location's employee roster will be counted separately when calculating your minimum participation rate.
• You'll have to verify your eligibility for each state where you offer SHOP coverage separately.
• If you have business locations in a state that runs its own SHOP, you can get coverage through that state's SHOP. Select the state where your business operation is located, and we'll take you to your state’s SHOP website.

If you operate multiple businesses in a state or in more than one state under the same EIN

• You can establish only one SHOP offer per EIN in each state. Learn more about controlled group rules from the IRS.
• When you count full-time equivalent employees (FTEs) to determine eligibility for SHOP, you must include FTEs from all your businesses.

If you operate multiple businesses in a state or in more than one state with different EINs

• You must create unique SHOP offers for each EIN. Controlled group rules apply when establishing the FTE count for your businesses — whether your businesses are all in one state or in multiple states.
• For each business with its own EIN, you’ll need to:
  • Meet SHOP eligibility criteria independently
  • Count all the FTEs in all your businesses using controlled group rules
  • Create separate SHOP coverage offers
• If you have remote employees, you can use your primary business address for all your remote employees, or use each of the locations where your remote employees work as a separate business location.

Questions?

• Get SHOP tools, calculators, fact sheets, how-to guides, videos, and other resources for employers.
• Contact the SHOP Call Center at 1-800-706-7893 (TTY: 1-888-201-6445).