Why Group Health Plans Aren’t Always the Cheaper Option for Small Businesses

When open enrollment rolls around, one of the most common questions I get is:

“Can I start a group health plan? Isn’t that cheaper?”

The short answer? No, not usually.

Especially if you’re a small business owner or have fewer than 10 employees.

Why People Think Group Health Plans Are Cheaper

This myth usually comes from past experience working for an employer who offered group coverage. If your paycheck only showed a $200 deduction for health insurance, of course it seemed affordable!

But here’s the truth:

Your employer was covering the majority of your premium.

Now that you’re considering a group plan as a business owner, you’re seeing the real numbers—and they’re shocking. As the employer, you’re now responsible for:

• 100% of your own and your family’s premium

• At least 50% of your employees’ premiums (as required by law)

That adds up fast.

What Group Plans Actually Cost

For small businesses, group health insurance can be outrageously expensive—especially for PPO plans. Here’s a reality check:

• An HMO plan is pricey on its own

• A PPO plan? Double that.

Unless you have at least 10 employees to spread out the risk, you likely won’t get favorable group rates. And if your employees are already getting marketplace coverage with tax credits, forcing a group plan could make their healthcare more expensive.

That’s because once they’re offered a group plan, they lose their eligibility for tax credits—even if the group plan is worse or more costly.

The Bottom Line

Unless your business is large enough to absorb the cost, a group health plan is usually not the best option. You may end up:

• Overpaying for your own coverage

• Paying for employee coverage they don’t even want

• Creating unnecessary financial strain on yourself and your team

So, What Should You Do?

The best move is to book time with a licensed independent broker who can:

✅ Help you compare individual plans vs. group plans

✅ Walk through your tax credit eligibility

✅ Customize a solution that protects your bottom line

And if you haven’t done so already, there’s still time to enroll for 2026.

The deadline is December 15th, and my calendar is filling fast.

Don’t let your plan auto-renew with major increases.

Let’s talk about better options.

📅 Book your appointment now: Schedule a consultation with JKapp Consulting

💡 Learn more about small business health insurance options.