What is small-business group health insurance?
Small-business group health insurance is a single health plan an employer offers to its employees (and often their families). Instead of every worker shopping for individual coverage on their own, the business sponsors one plan and the risk is spread across the whole group. Because employees are pooled together, group plans can't turn anyone away for a pre-existing condition, and rates are based on the group rather than on any one person's health.
For most small businesses, the employer pays a share of the monthly premium — commonly at least half of the employee-only cost — and employees cover the rest, usually through payroll deductions made with pre-tax dollars. Offering a solid group plan is one of the most effective ways a small company can compete with larger employers for good people: health benefits consistently rank near the top of what employees value, and they're a meaningful part of total compensation. A group plan also keeps things simple, because everyone is on the same coverage with one renewal date, one set of benefits, and one point of contact.
What is SHOP — and the small business tax credit?
SHOP stands for the Small Business Health Options Program — the part of the Affordable Care Act marketplace built specifically for small employers. Offering coverage through SHOP is the path that can unlock the small business health care tax credit, which is one of the biggest reasons small employers look at group coverage in the first place.
In general, employers with fewer than 25 full-time-equivalent (FTE) employees who pay average annual wages under the IRS threshold, offer coverage through SHOP, and pay at least half of their employees' premiums may qualify for a tax credit worth up to 50% of the premiums the employer pays (up to 35% for tax-exempt organizations). The smaller your team and the lower your average wages, the larger the credit tends to be. It's claimed when you file, and it's generally available for two consecutive tax years.
The eligibility rules have real detail to them — how FTEs are counted, which wages are included, and how the credit phases out — so we help check whether your business is likely to qualify and then point you to your tax advisor to confirm the numbers before you count on them.
What Honorbrook handles for you
As an independent, SHOP-certified agency, we manage the moving parts so you can keep running your business. Our help is free — carriers pay us when we place coverage, and your pricing is the same whether or not you use an agent. Here's what we take off your plate:
- Carrier comparison — we shop multiple carriers and plan tiers side by side so you see real cost and benefit tradeoffs, not just one quote.
- Plan design — we help you structure deductibles, copays, networks, and your employer contribution to fit your budget and your team.
- Employee enrollment & onboarding — we walk your employees through their options and handle the enrollment paperwork so sign-up is smooth.
- Renewals — we review your plan every year, re-shop the market when it makes sense, and flag changes before they hit your renewal.
- Compliance questions — we answer your day-to-day questions on participation requirements, contribution rules, and how SHOP and the tax credit work.
Group plan vs. ICHRA — which fits your business?
A traditional group/SHOP plan isn't the only way to offer health benefits. An ICHRA (Individual Coverage HRA) lets you reimburse employees tax-free for individual coverage they buy themselves, with a fixed monthly amount you control. Both are legitimate, employer-sponsored ways to provide benefits — they just trade off differently on control, cost predictability, and administration.
| Group / SHOP plan | ICHRA | |
|---|---|---|
| Who picks the plan | Employer chooses one plan for everyone | Each employee picks their own individual plan |
| Cost predictability | Premiums can shift at renewal | You set a fixed monthly allowance |
| Admin burden | Carrier & agent handle most of it | You manage allowances & reimbursements |
| Tax credit eligibility | May qualify for the SHOP small business credit | Not eligible for the SHOP small business credit |
| Best for | Teams wanting one shared plan & possible credit | Teams wanting budget control & employee choice |
Not sure which fits your team?
Tell us your headcount and budget — we'll compare a group/SHOP plan and an ICHRA for you, free.
Get my free group comparisonWho it's a good fit for
Group/SHOP coverage tends to fit small businesses that want to offer one consistent plan to their whole team, value the simplicity of a single renewal and benefit set, and want to check whether they qualify for the small business tax credit. If you'd rather set a fixed budget and let employees choose their own plans, an ICHRA may be the better fit — and we're glad to compare both with you before you decide.