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Why small group plans make sense for many employers

Offering employee health care is no longer optional for small businesses—it’s essential. It’s a strategic decision that impacts a business’s bottom line, the team’s productivity, and the company’s long-term success.

Small business owners are forced to wear many hats—from managing finances and building a team to trying to grow in an unpredictable economy. But they also know that their employees are their greatest asset. Investing in their health is one of the most effective ways to build a resilient, successful business.

So, what’s the best health coverage option for small businesses—individual health plans or small group plans?

The answer depends on the employer. When deciding between these two models, each must carefully consider the needs and preferences of their employees and their budgetary constraints.

Small group plans: How do they benefit employers?

✅ Tax advantages

Employer contributions are typically tax-deductible. Employees can pay their premiums with pre-tax dollars, lowering their taxable income. And eligible small businesses can even qualify for the Small Business Health Care Tax Credit—that’s a win-win for a business’s payroll and their workforce.¹

✅ Talent magnet

Offering robust benefits shows employers are invested in the health and welfare of their team. It attracts top talent and builds loyalty with current employees. In a landscape where retention is critical, health benefits speak louder than words.

✅ Support and simplicity

Some health insurance companies that offer small group plans deliver a number of services and support to make life easier on employers. Take Kaiser Permanente. Their efficient care and coverage model creates a unified, streamlined approach to health care management that reduces administrative hassles. They also offer easy plan management through a dedicated employer website, and a variety of flexible plan options across bronze, silver, gold, and platinum tiers. This allows employers to choose what works best for their business—and gives them a partner they can rely on every step of the way.

Small group plans from companies like Kaiser Permanente are designed to meet the realities of modern small businesses—especially those with lean teams, big ambitions, and a commitment to doing right by their employees.

Understanding individual plans and ICHRAs

The rise of Individual Coverage Health Reimbursement Arrangements (ICHRAs) has grabbed headlines—and investors. Major industry players are betting big on this model, and state governments are exploring legislation to support adoption.² The concept sounds appealing: give employees a stipend to shop for their own coverage and let tech platforms handle the rest.

ICHRAs can confuse employers and employees alike due to their complexity. Workers may face limited plan options depending on geography. They may also not understand how to coordinate with tax credits and can even lose access to the provider networks and care quality they expect.

Though the federal government initially projected over 11 million people would enroll in ICHRAs by 2029, current adoption stands at 300,000 to 1 million enrollees.² That’s in contrast to the 160 million Americans covered through traditional employer-sponsored insurance. That gap tells a story: ICHRAs are promising but are still in the early stages of adoption with some employers waiting to see how these plans meet employer’s needs.

How small group plans support employee health

Employees want dependable, easy-to-use health care. With small group plans from insurers like Kaiser Permanente, they can get exactly that:

✅ Better coverage, lower costs

Group plans often include comprehensive benefits—lower deductibles, broader provider networks, and affordable prescription coverage. And with premiums deducted pre-tax, every paycheck goes further.¹

✅ Virtual care, anytime, anywhere

Kaiser Permanente emphasizes preventive care, not just treatment. So, employees can access virtual care on their schedule—even during lunch breaks—helping them stay healthy and productive on the job.

✅ Stability and simplicity

Small group coverage is employer-backed and easy to manage. And when life changes—marriage, kids, illness—employees have a trusted provider network ready to help.

The bottom line: Invest in your team, reap the rewards

Let’s be real—health insurance can feel like a hassle. But it doesn’t have to be.

With some small group carriers, you get more than a plan. Insurers like Kaiser Permanente function as a partner that makes health care work for businesses, their people, and their bottom line.

Small group plans are more than just coverage—they’re a smart investment in a company’s workforce and their future. Employers need to make sure they choose a plan that supports healthy employees and a healthy business.