Five Ways to Cover Your Team's Health Care This Open Enrollment — And Who Qualifies for Each

Health care cost and availability has been the number one issue for small business owners nationally for 39 consecutive years, according to the NFIB Legal Center. With open enrollment season here, an October 9, 2026 NFIB legal blog lays out the main ways a small employer can help workers get covered, and the rules that decide which one fits.

Here is a plain-language walkthrough of each option, who qualifies, and what to weigh before you decide.

First: Do You Have to Offer Coverage?

Most small employers are not required to offer health insurance. NFIB notes that the federal mandate applies only to Applicable Large Employers, which are businesses averaging at least 50 full-time employees (or full-time equivalents) in the prior year. If you are under that line, offering coverage is a choice, often driven by hiring and retention rather than law.

Option 1: Traditional Group Coverage

You select one or more plans and contribute toward premiums. Employees may pay their share with pre-tax dollars through a cafeteria plan. NFIB lists the drawbacks as renewal premium increases, limited plan choices, and possible carrier participation or contribution requirements. If you have a renewal coming, ask your broker early what the increase will be and which participation rules apply.

Option 2: SHOP Marketplace Plans

Employers with 50 or fewer employees are eligible for the Small Business Health Options Program. The potential prize is the Small Business Health Care Tax Credit. To qualify, NFIB says a business must have fewer than 25 full-time employees, pay at least 50% of employee-only premiums, and meet certain wage requirements. The credit can reach up to 50% of qualifying premiums paid. NFIB advises verifying eligibility before you enroll, so confirm with your tax preparer first.

Option 3: CHOICE Arrangements (Formerly ICHRA)

These arrangements are available to employers of any size, with no federal limit on the employer contribution. You provide a tax-free allowance, and employees use it to buy individual coverage. The tradeoffs, per NFIB: employees take on the shopping burden, you have notice and documentation duties, and the arrangement may affect an employee's eligibility for Marketplace tax credits. This route suits owners who want predictable monthly costs and workers who live in different states.

Option 4: QSEHRA

A Qualified Small Employer Health Reimbursement Arrangement is for employers with fewer than 50 employees that do not offer a group health plan. The 2026 federal annual limits are $6,450 for individual coverage and $13,100 for family coverage. It lets you reimburse employees for coverage costs up to those caps, which makes budgeting simple: you know the maximum you could owe per person.

Option 5: High-Deductible Plan With an HSA

High-deductible health plans typically carry lower premiums and higher deductibles. Health savings accounts let employees pay eligible expenses with pre-tax dollars, and employers may contribute as well. This option works best when your team is comfortable with larger out-of-pocket exposure in exchange for lower monthly costs.

How to Choose

NFIB recommends weighing several factors, and each one can point you toward a different option:

Budget. Decide the dollar amount you can sustain per employee, then see which structures let you cap it.
Workforce size and growth. Crossing eligibility thresholds can change your options, so plan for the headcount you expect, not just today's.
Multi-state employees. A single group plan may not work well if staff live in different states.
Local provider networks. A cheap plan is no bargain if your team's doctors aren't in it.
Administrative and compliance duties. Reimbursement arrangements bring notice and documentation requirements.
Tax incentives. Confirm whether you can claim the small business credit before choosing a plan that affects it.

Budgeting for the Cost

Whatever you pick, build it into your numbers. A current profit and loss statement shows how much room you really have per employee. If you are also thinking about how workers are classified, remember that coverage questions differ for staff and contractors; our guide on independent contractor versus employee explains the distinction. And review your business insurance program as a whole, since health benefits are only one piece of your risk picture.

What the Article Doesn't Say

The NFIB piece does not list specific enrollment deadlines beyond the open enrollment season referenced in its title. Plan dates vary by carrier and Marketplace, so ask your broker or the plan administrator for exact cutoffs rather than assuming. NFIB invites questions to its Legal Center at info@nfib.org.

A Simple Way to Start This Week

Write down your headcount, including full-time equivalents, and how many employees need family coverage.
Set a per-employee monthly budget you can afford in a slow quarter.
Ask your tax professional whether you might qualify for the small business credit.
Get quotes for at least two different structures and compare total employer cost, not just premiums.
Confirm enrollment deadlines in writing.

The Bottom Line

You aren't required to offer coverage if you have fewer than 50 full-time employees, but many owners do, and the structure you choose determines your costs, your paperwork, and your employees' experience. Group plans, SHOP, CHOICE arrangements, QSEHRAs, and HSA-eligible plans each fit a different kind of business. Match the option to your budget and workforce, check your tax credit eligibility before you enroll, and give yourself time before the deadline.

Photo by National Cancer Institute on Unsplash