A Guide for Small Business Owners: Save money with a group health insurance plan
If you’re a small business owner, you’ve likely felt the impact of the Affordable Care Act (ACA) on health insurance. Rising costs have affected not only your personal coverage but also made it more challenging to offer group health insurance to employees.
However, there are solutions—ones that many business owners simply aren’t aware of.
In this article, we’ll break down how the ACA disrupted traditional group health plans, the challenges it created for small businesses, and a little-known strategy that can help you regain control while providing affordable, flexible coverage options for your employees.
How the Affordable Care Act Disrupted Group Health Plans
Before the Affordable Care Act (ACA), small business owners could set up group health insurance plans relatively easily and at competitive rates. However, when the ACA took effect, three major challenges emerged:
- Declining Employee Participation – With the introduction of ACA-subsidized individual plans, many employees opted out of their employer’s group coverage in favor of lower-cost marketplace options.
- Failure to Meet Participation Requirements – As employee enrollment dropped, many small business group plans fell short of the 70% participation requirement set by insurers, causing plans to be canceled or unavailable.
- Business Owners Were Excluded from Subsidies – Unlike employees, business owners couldn’t qualify for ACA subsidies due to income thresholds. As a result, they lost access to affordable group rates and were forced to purchase individual coverage at full price—often at much higher premiums than before.
And the challenges didn’t stop there. Business owners who still wanted to offer group coverage found themselves navigating even more obstacles.
The Cost Plan Burden on Business Owners
One of the biggest financial challenges for small business owners offering group health insurance is the requirement to cover up to 25% of the total plan’s premiums. Unlike employees, who can shop for ACA-subsidized individual plans, business owners are left with no such relief.
As premium costs continue to climb, this obligation has become a significant financial strain, especially for businesses operating on tight margins. Covering a quarter of the total plan’s cost—on top of other operational expenses—makes it increasingly difficult to justify maintaining a group health plan.
For many small businesses, this financial burden has led to a difficult decision: either absorb unsustainable costs or drop group health coverage altogether.
The Blue Cross Blue Shield Workaround That Most Business Owners Don’t Know About
Most small business owners don’t realize that Blue Cross Blue Shield (BCBS), one of the nation’s most respected health insurers—created a workaround to these ACA roadblocks.
Here’s how it works:
No More 70% Participation Requirement – If you enroll in a Blue Cross Blue Shield group plan during ACA Open Enrollment, BCBS waives the 70% participation rule. This means that even if only a handful of employees enroll, the plan will still be issued.
No Employer Contribution Requirement – Typically, business owners have to cover at least 25% of premiums for all employees. But BCBS allows business owners to contribute as little as 0%, giving you full control over how much, if anything, you want to pay.
Flexible Employer Contributions – Unlike traditional group plans, BCBS allows business owners to adjust their contributions annually. One year, you might cover 5% of premiums, the next year 0%, and the following year a different amount—depending on business conditions.
This empowers business owners by eliminating cost constraints while still providing employees with access to discounted group health insurance rates.
A Win-Win Solution for Business Owners and Employees
This approach offers benefits for both employers and employees, creating a cost-effective and flexible alternative to traditional group health insurance.
For Business Owners:
- Eliminates the financial burden of covering 25% of total premiums.
- No risk of failing participation requirements, ensuring plan stability.
- Retains top talent by offering group health options.
- Flexibility to adjust contributions based on market conditions.
- Access to group pricing for themselves and key employees, reducing personal health insurance costs.
For Employees:
- Freedom to choose between enrolling in the employer’s group plan or keeping their ACA-subsidized marketplace coverage.
- Higher earners benefit from lower group health insurance rates, avoiding the high costs of unsubsidized ACA plans.
- Access to better coverage options compared to many individual marketplace plans.
By leveraging this strategy, businesses can provide health benefits without the financial strain of traditional group plans while giving employees more choices and better coverage options.
Why This Matters Now
With rising health insurance costs, small business owners need every advantage they can get to retain employees and control expenses.
If you’ve been avoiding group health insurance because of costs, participation requirements, or ACA limitations, this Blue Cross Blue Shield workaround could be the solution you’ve been looking for.
If you’ve been struggling with health insurance options for your business, let’s talk. We can help you explore how to implement a group health plan that works for you—without unnecessary costs or restrictions.
