Medically reviewed by Jawad Arshad, MD, FACEP. Last reviewed: October 16, 2026.
The best group health insurance for small teams with remote workers is the plan that every employee can actually use where they live. A cheap group plan is no help to a worker in a state the carrier does not serve.
This guide compares the three real options for a remote team, shows what they cost with sourced averages, and walks through a worked payroll example.
Key facts (2026):
- Employer-sponsored health coverage averaged $9,325 a year for single coverage and $26,993 for family coverage in 2025 (KFF, 2025 Employer Health Benefits Survey).
- Workers paid an average of $1,440 a year for single coverage and $6,850 for family coverage in 2025 (KFF, 2025 Employer Health Benefits Survey).
- An ICHRA can set different allowances for employees whose primary work site is in the same rating area (26 CFR 54.9802-4).
- Employee-paid health premiums through a cafeteria plan are exempt from income tax withholding, Social Security tax and Medicare tax (IRS Publication 15-B, 2026).
- Employers and employees each pay 7.65% FICA, made up of 6.2% Social Security and 1.45% Medicare (IRS Publication 15, 2026).
What is the best group health insurance for small teams with remote workers?
The best group health insurance for a small remote team is a single group plan with a multi-state or national network when most employees share a state, and an ICHRA when employees are spread across many states. Section 125 sits on top of either choice.
Table: Group health options for a small remote team
| Option | Best fit | Main catch |
|---|---|---|
| One group plan with a multi-state or national network | Most staff in one or two states | Every employee still needs to live in the carrier's service area |
| A separate group plan in each state | A few people in each of several states | Each plan has its own participation rules and renewal |
| ICHRA (individual coverage HRA) | Staff scattered across many states | Employees buy individual plans, so there is no single group policy |
| Section 125 premium only plan | Any employer with a group plan | Saves tax only. It is not coverage by itself |
Summit Health Benefits' guide to the best small business health insurance ranks carriers for in-office teams. This guide covers what changes when your people work from home.
How do remote workers in different states get the same group health plan?
Remote workers get the same group plan only when the carrier serves every state where they live. Ask the carrier for written confirmation of service areas before you sign, because the network, not your office address, decides who can enroll.
Small employers on the health exchange SHOP follow a simple pattern. The Virginia Health Benefit Exchange says you enroll in the state where your primary business site is, and that you can pick one plan with a multi-state or national network for all locations, or a different plan in each state. Employees across locations count toward participation under the first approach, and each location is counted separately under the second (Virginia Health Benefit Exchange, 2026).
Participation matters. Virginia's SHOP, for example, requires you to enroll at least 70% of the employees you offer coverage to (Virginia Health Benefit Exchange, 2026). Other states set their own minimums, so check the state where your business is based.
- List every employee by home state and county.
- Ask each carrier for a written service-area confirmation for those locations.
- Ask for network access in each employee's home area, not just the headquarters.
- Confirm the participation percentage for your state.
- Compare the result to an ICHRA before you commit.
Summit Health Benefits' guide to Section 125 for remote employees in multiple states covers the payroll side of the same problem.
What does group health insurance cost for a small remote team?
Group health insurance cost an average of $9,325 a year per employee for single coverage in 2025, and the employer paid most of it. Workers contributed $1,440 a year on average, which leaves an average employer share of $7,885 (KFF, 2025 Employer Health Benefits Survey).
Table: Cost for a 10-person remote team on 2025 KFF averages (hypothetical headcount)
| Line | Per employee, single | 10 employees, single | Per employee, family | 10 employees, family |
|---|---|---|---|---|
| Total premium (KFF, 2025) | $9,325 | $93,250 | $26,993 | $269,930 |
| Employee share (KFF, 2025) | $1,440 | $14,400 | $6,850 | $68,500 |
| Employer share | $7,885 | $78,850 | $20,143 | $201,430 |
These are national averages for all employers. Your quote will vary by state, age and plan design. Small firms also tend to carry higher deductibles, averaging $2,631 for single coverage at firms with 10 to 199 workers (KFF, 2025). Summit Health Benefits' small business health insurance cost guide breaks costs out further.
Worked example: a 10-person remote team with family coverage
Take 10 remote employees who each pay the KFF average family share of $6,850 a year through payroll.
Table: Employer FICA savings with a Section 125 plan (hypothetical)
| Line | Amount | Source |
|---|---|---|
| Employee premium contributions, 10 employees | $68,500 a year | KFF, 2025 |
| Employer FICA avoided at 7.65% | $5,240.25 a year | IRS Publication 15, 2026 |
| Summit Health Benefits admin fee, $35 x 10 x 12 | $4,200 a year | Summit Health Benefits |
| Net to the employer | $1,040.25 a year | Calculated |
The employees save the same 7.65% on their side, plus federal income tax at their own bracket. The plan covers its fee when employee contributions exceed about $457.52 a month per employee ($35 divided by 7.65%). Summit Health Benefits reports typical employer FICA recapture of $91 to $136 per enrolled employee per month across the benefits it administers, which nets $56 to $101 after the $35 fee. Single-coverage teams with a $120 monthly share save less on premiums alone, so the calculator is worth running before you decide. See the FICA savings guide for the full math.
Is an ICHRA better than a group plan for a remote team?
An ICHRA is often better when employees live in many states, because each employee buys an individual plan in their own area and you reimburse them. A group plan is simpler and cheaper to administer when staff share a state.
The federal rule lets an employer set ICHRA classes of employees, including "employees whose primary site of employment is in the same rating area" (26 CFR 54.9802-4). The HRA must be offered on the same terms to everyone in a class. If you offer a group plan to one class and an ICHRA to another, the smallest allowed class is 10 employees for an employer with fewer than 100 employees, with an exception for classes defined by a state or combination of entire states (26 CFR 54.9802-4). Employers must also give written notice at least 90 calendar days before the plan year starts, with limited exceptions (26 CFR 54.9802-4).
Table: Group plan versus ICHRA for remote teams
| Question | Group plan | ICHRA |
|---|---|---|
| Who picks the plan | The employer | The employee, in the individual market |
| Works across many states | Only where the carrier operates | Yes, employees buy locally |
| Contribution control | Employer sets a share of premium | Employer sets a fixed allowance per class |
| Notice requirement | Standard open enrollment | 90 calendar days before the plan year, with exceptions |
Read Summit Health Benefits' explainers on how an ICHRA works and ICHRA versus group health insurance before choosing, and see the alternatives to group coverage overview if cost is the main driver.
Which group health plan has best wellness program incentives for hybrid workforces?
No group health plan is best on wellness incentives by itself, because federal rules cap the reward for programs that depend on a health result. A participatory program, where no reward depends on meeting a health standard, is not subject to that cap (29 CFR 2590.702).
Under the federal wellness rule, a reward for a health-contingent program cannot exceed 30% of the total annual cost of employee-only coverage, and the cap rises to 50% for programs aimed at tobacco use (29 CFR 2590.702). On the 2025 KFF average single premium of $9,325, the 30% cap is $2,797.50 a year. Cash rewards are generally taxable to the employee, which Summit Health Benefits explains in its guide to taxable wellness incentives.
For a hybrid team, pick programs that work from home: virtual coaching, step challenges and online screenings. Ask the carrier which wellness vendors serve every state where your staff live.
How do I choose group health coverage for a remote team?
Choose by headcount by state, not by price alone. The right plan is the cheapest option that covers every employee at home, meets your state's participation rule, and leaves room to add Section 125.
Copy this email and send it to a carrier or broker:
Subject: Group health quote for a remote team
>
Hi, we are a [number]-person company with employees in [list states]. Please confirm in writing: (1) which of these states your small group plan serves, (2) the network in each employee's home county, (3) the minimum participation percentage and employer contribution required, (4) how new hires in other states are handled mid-year, and (5) whether your plan works with a Section 125 premium only plan. Thank you.
If the answers show gaps, ask for an ICHRA comparison. Summit Health Benefits' Section 125 cafeteria plan guide explains how the tax savings layer onto either option, and you can model your own numbers in the Section 125 savings calculator.
Get a Health Plan Design for Your Remote Team
A Summit Health Benefits advisor will map where your employees live, compare a group plan to an ICHRA, and show the Section 125 savings on your headcount. Free, with no obligation.
Frequently Asked Questions
What are the best group health plans for startups with remote teams?
What is affordable group health insurance for a small business with remote staff?
What are the best group health coverage options for remote teams?
Can a small business offer one group health plan to employees in different states?
Does Section 125 work for remote employees?
Sources: KFF, 2025 Employer Health Benefits Survey (2025); IRS Publication 15-B, Employer's Tax Guide to Fringe Benefits (2026); IRS Publication 15, Employer's Tax Guide (2026); 26 CFR 54.9802-4, individual coverage HRAs (2026); 29 CFR 2590.702, wellness program rules (2026); Virginia Health Benefit Exchange, small business employer guidance (2026). Summit Health Benefits fee and recapture figures come from Summit Health Benefits plan terms.
Results depend on your plan terms and IRS rules. Not legal or tax advice.