How Do Small Business Owners Get Health Insurance?

If you run your own business, you don’t have an HR department handing you an enrollment form. That means finding health insurance is entirely on you — and it can feel overwhelming fast.

Here’s the short answer: small business owners can get health insurance through the SHOP Marketplace, private ACA plans, a spouse’s employer plan, professional associations, or a Health Reimbursement Arrangement (HRA). The right choice depends on your income, whether you have employees, and how much flexibility you want.

Your Main Options at a Glance

Option 1: The SHOP Marketplace

The Small Business Health Options Program (SHOP) is run through Healthcare.gov and is designed specifically for small businesses with 1 to 50 employees.

To qualify, you need at least one full-time equivalent employee (other than yourself or a spouse), and you must offer coverage to all full-time staff.

One major benefit — if you have fewer than 25 employees and pay average wages under $56,000/year, you may qualify for the Small Business Health Care Tax Credit worth up to 50% of your premium costs.

Option 2: ACA Individual Plans (The Most Common Route)

Most self-employed owners without employees simply buy an individual plan through the ACA marketplace at Healthcare.gov.

Your premium subsidies depend on your net income. If you earn between 100% and 400% of the federal poverty level, you’ll likely qualify for a premium tax credit that significantly reduces your monthly cost.

Open enrollment typically runs November 1 through January 15. Outside that window, you’d need a qualifying life event to enroll.

Option 3: Join a Spouse or Partner’s Plan

If your spouse has employer-sponsored insurance, this is usually the cheapest and easiest path. Most employer plans allow you to join as a dependent during open enrollment or after a qualifying event like marriage or losing other coverage.

Check whether the employer contribution applies to dependents — sometimes it does, sometimes it doesn’t.

Option 4: Association Health Plans

Some trade groups, chambers of commerce, and professional associations offer group health plans to members. These can be a solid middle ground — you get group pricing without needing your own employees.

Examples include the National Association for the Self-Employed (NASE) and local chambers of commerce. Quality and availability vary significantly by state and association.

Option 5: HRAs — The Flexible Modern Option

A Health Reimbursement Arrangement lets you reimburse employees (or yourself in some cases) for individual health insurance premiums tax-free.

HRAs are especially useful if your employees have varying coverage needs and you want to give them flexibility to choose their own plan.

Don’t Forget the Tax Deduction

As a self-employed owner, you can deduct 100% of your health insurance premiums from your taxable income. This applies to premiums for yourself, your spouse, and your dependents.

This deduction is taken on Schedule 1 of your personal tax return — not on Schedule C — and it doesn’t require itemizing.

It’s one of the most valuable deductions available to small business owners and can reduce your tax bill significantly.

Steps to Take This Week

1. Estimate your net income for the year — this determines subsidy eligibility.
2. Check Healthcare.gov for individual plans and SHOP plans in your state.
3. Ask your spouse’s HR if their plan allows dependents.
4. Look into your trade association for group plan availability.
5. Talk to a health insurance broker — they’re free to use and can compare options across insurers.

Getting covered doesn’t have to be complicated. The key is knowing which door to walk through first based on your situation.