Health Insurance for Small Business Under 10 Employees

Compare health insurance options for businesses with fewer than 10 employees. Businesses with 5–9 W-2 employees qualify for Section 125 Cafeteria Plans. Those with 1–4 employees have WoW Health and individual market options.

Health Insurance Options for Businesses Under 10 Employees

The right plan depends on your exact employee count. 5–9 W-2 employees: Section 125 Cafeteria Plan at $0 employer cost. 1–4 employees: WoW Health Plans or individual marketplace coverage.

Eligibility by Business Size

Section 125 requires a minimum of 5 W-2 employees. Businesses with 5–9 employees can implement a full Cafeteria Plan and generate $91.81/employee/month in FICA savings. Businesses under 5 employees use WoW Health or individual plans.

Cost Comparison for 10-Employee Business

Traditional group insurance: $4,000–$8,000/month for 10 employees. Section 125 Cafeteria Plan: $0 employer cost, funded by approximately $918/month in FICA savings. Net annual savings versus traditional group insurance: $48,000–$96,000.

Why Section 125 Plans Work Well for Small Teams

Section 125 does not require large group purchasing power. Even a 5-employee business generates meaningful FICA savings. The plan covers full-time and part-time workers equally, which is especially valuable for small businesses with mixed workforce compositions.

Calculate Your Costs

Use the Summit Health Benefits FICA savings calculator to enter your exact employee count and average wages. Get a precise monthly savings figure you can compare against your current health insurance spend.

Frequently Asked Questions

Questions about minimum employee requirements, part-time eligibility, and Section 125 compliance for sub-10-employee businesses are answered on our FAQ page and in our small business health insurance guide.