Health Insurance for Small Business Owners

Building your own business means you’re in charge of everything, including finding a health insurance plan that meets your needs.

Unlike working in a corporate environment, you don’t have an HR team narrowing down your options or negotiating rates on your behalf. It’s up to you to evaluate costs, coverage, networks and long-term fit.

And the stakes are high. Pick the wrong plan, and you could face sky-high deductibles, surprise bills from out-of-network providers or coverage gaps when it matters most.

Whether you’re choosing coverage for the first time or reconsidering your current plan, this guide is designed to help. We’ll break down the most common health insurance options for small business owners. Plus, we’ll explain what to look for in a plan and help you choose coverage that fits your life and your budget.

What Type of Health Coverage Do You Need?

There’s no one-size-fits-all plan for small business owners. The right coverage matches your situation and your goals.

Maybe you’ve just left a full-time job and are weighing COBRA against marketplace plans. Maybe you’re self-employed and only looking to cover yourself and a spouse. Or maybe you’re preparing to hire and want a plan that can grow with your team.

Your priorities matter, too. Some owners want the lowest possible premium. Others are focused on protecting against unplanned medical expenses.

Before you shop, consider these questions to align your plan with your priorities:

• Who will be covered? Is it just you, or are you also covering a spouse, dependents, or future employees?
• What can you afford? Monthly premiums are a start, but don’t stop there. Also factor in deductibles, co-pays and the annual out-of-pocket max.
• Do you have preferred doctors or prescriptions? Make sure they’re covered in-network.
  
• How much flexibility do you need? Will a local network work, or do you travel often and need national coverage?
  
• Are you planning to grow? If you’ll be adding employees, take a look at plans that can scale into group coverage.

Where to Find Health Insurance as a Small Business Owner

Once you’ve outlined what you’re looking for, the next step is knowing where to look. Small business owners have more options than you might expect, each with different tradeoffs for cost, coverage and convenience.

Marketplace Plans
Best for: Solo business owners and freelancers

Marketplace plans are available through Healthcare.gov or your state exchange. Plans are tiered (Bronze, Silver, Gold, Platinum), balancing monthly premiums with out-of-pocket costs. Depending on your income, you may qualify for subsidies that lower your premium.

Enrollment is limited to Open Enrollment periods unless you’ve had a qualifying life event, like leaving a job or getting married.

Private Health Plans
Best for: Business owners who don’t qualify for subsidies or want broader provider access

Private plans are purchased directly from insurance companies or through brokers. They may offer more flexibility or different network options compared to marketplace plans, but usually without the benefit of income-based subsidies.

Unlike marketplace plans, some private plans allow enrollment year-round, though options may vary by insurer and may not include ACA-compliant coverage.

Health Plans and Accounts for Business Owners

Some plans minimize premiums. Others maximize flexibility. And some are designed to help you save for future care. Choosing the right structure starts with understanding how each one works.

High Deductible Health Plans (HDHPs)
Best for: Those who are generally healthy and want to lower monthly premiums

HDHPs typically offer lower premiums in exchange for higher deductibles. They can be a smart option if you don’t anticipate frequent medical expenses and want to keep upfront costs low. These plans also make you eligible to open a Health Savings Account (HSA).

Health Savings Accounts (HSAs)
Best for: Owners who want to save for future healthcare costs with tax advantages

HSAs are only available with an HDHP. They allow you to contribute pre-tax dollars, grow your funds tax-free and use them tax-free for qualified medical expenses. It’s an effective tool for managing healthcare costs and long-term savings.

PPOs and HMOs
Best for: Predictable costs and access to ongoing care

PPOs (Preferred Provider Organizations) and HMOs (Health Maintenance Organizations) are traditional plan structures that offer more comprehensive coverage, usually with higher premiums.

PPOs provide greater flexibility in choosing providers, often without referrals. HMOs tend to have lower premiums, but typically require you to stay within a clearly defined network and get referrals for specialists.

Group Health Plans
Best for: Owners with at least one full-time employee (not a spouse)

Group plans allow you to offer health insurance to employees and join the plan yourself. They’re often more affordable per person due to pooled risk, and they may qualify your business for the Small Business Health Care Tax Credit.

COBRA (Temporary Option)
Best for: Recently self-employed individuals transitioning off employer coverage

COBRA lets you keep your previous employer’s health plan for 18 to 36 months. It’s usually more expensive since you pay the full premium, but it can provide a short-term bridge while you explore other options.

Health Sharing Plans
Best for: Owners comfortable with more risk and fewer coverage guarantees

These non-traditional options involve members contributing to a shared pool of funds. They’re often lower in cost but aren’t regulated like insurance and don’t guarantee coverage for all conditions. They may suit healthy individuals who want to minimize monthly costs and are okay with potential limitations.

How to Compare Plans

There are several tools and resources to help you weigh your options.

Healthcare.gov offers a comparison feature to evaluate marketplace plans side by side, including estimated total costs based on your expected usage. If you're considering a high-deductible plan, HSA calculators can help you assess potential tax savings and long-term benefits.

A licensed insurance broker can offer guidance across multiple insurers, while a CPA or financial advisor can help you understand how healthcare expenses fit into your broader business and tax strategy.

Next Steps for Smarter, More Affordable Coverage

Health coverage can be complex, but your next steps don’t have to be. Use this checklist to take the guesswork out of choosing or reviewing your health coverage.

Getting Started: How to Set Up Health Coverage for Yourself

• Review your previous employer coverage and COBRA deadlines (if applicable).
• Visit Healthcare.gov or your state exchange to compare marketplace options.
• Research private plans through an insurer or independent broker.
• Decide who needs coverage: just you, or dependents too?
• Choose the right plan type (PPO, HMO, HDHP) based on your health needs and budget.
• Consider setting up an HSA if you choose a high-deductible plan.
•  Save your plan documents and ID cards in a secure, easy-to-access place.

Already Covered? Reevaluate Your Current Plan

• Compare your current plan against other available options during Open Enrollment.
• Run the numbers: premiums, deductibles, out-of-pocket max, and co-pays.
• Check your provider network — are your preferred doctors still in-network?
• Confirm whether your prescriptions are fully or partially covered.
• Review any changes in income or business structure that could affect subsidies or eligibility.
• If you now have employees, explore group plan options that include owner participation.
• Keep plan documents, ID cards, and customer service contacts organized.

Look for more resources to support your business journey.

Visit Comerica.com/insights for professional guidance on financial planning, business growth and managing your future with confidence.

Comerica Wealth Management consists of various divisions and affiliates of Comerica Bank and subsidiaries of Comerica Bank including Comerica Insurance Services, Inc. and its affiliated insurance agencies. Comerica Bank is an Equal Opportunity Lender. Securities and other non-deposit investment products are not insured by the FDIC, are not deposits or other obligations of, or guaranteed by, Comerica Bank or any of its affiliates, and are subject to investment risks, including possible loss of the principal invested. Comerica and its affiliates do not provide tax or legal advice. Please consult with your tax and legal advisors regarding your specific situation.