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Why Individual Health Insurance Benefits Small Business Employees

Written by: PeopleKeep Team
December 14, 2015 at 12:00 PM

Anyone who owns, manages or is employed by a small business understands the difference the “little things” can make in employee satisfaction. Many of the services that are above and beyond base salary are understandably deemed unessential — especially when a company is just getting off the ground. However, benefits that affect health and well-being are important for multiple reasons, and individual health insurance is a solution that benefits small business employees.

As opposed to perks such as unlimited snacks or access to a free parking garage, health insurance support is a benefit that small-business employees often are unwilling to live without — and rightfully so. At a time when individuals and families must purchase health insurance or pay fines, in accordance with the Affordable Care Act, employer-supported medical coverage is perhaps more vital and sought after than ever before.

Individual health insurance is an attractive option that benefits small business employees because of its ability to be flexible, personalized, accessible and affordable — especially when the employer offers a monthly allowance to defray monthly premium expenditures.

Flexible and Personalized Plans

Employees that choose individual medical insurance through the Health Insurance Marketplace have a unique opportunity to craft a plan that meets their specific needs without providing any unnecessary coverage.

Individual health insurance empowers small-business employees with the level of flexibility and customization that people have grown accustomed to in so many aspects of modern life. From on-demand TV streaming to personalized sneakers with the click of a mouse, people expect the power to choose — and healthcare is no exception.

Accessible Details

Small businesses that use healthcare reimbursement software give employees simple, easy access to their employer-provided monthly allowance and reimbursement requests. It also gives employers a hassle-free way to track requests and approved allowances.

Notably, individual health plans are permanent and portable, meaning they will stay with the beneficiary even if he or she transitions to a new company. The person owns the plan, regardless of the place of employment. This boon alleviates the need for expensive COBRA premiums.

Affordable Plans

Cost efficiency is, of course, one of the most frequent questions about individual health insurance. What small-business employees are quickly finding is multiple facts about the affordability of individual health insurance:

  • On average, individual health insurance plans cost 20 percent less than traditional group health insurance.
  • Premium tax credits give each qualifying employee up to thousands of dollars to help pay for plans purchased in the Health Insurance Marketplace.
  • Additional financial support is available for employees at small businesses that provide reimbursements through defined contributions. In this scenario, many employees can have 100 percent of their premium covered.

Factors such as flexibility, accessibility and affordability of medical coverage alone aren’t enough to make an employee happy. However, these factors are critical, and they’re a big reason why individual health insurance benefits small business employees.


The Affordable Care Act has made cost-efficient health coverage more important than ever. Because individual health insurance is flexible, personalized, accessible, and affordable, it is an excellent option for employees at small businesses.

If you have a question about how the premium tax credit and employer-defined reimbursement are helping small businesses meet employees’ insurance needs, please leave a comment below. We will answer your question as soon as possible.

Topics: Individual Health Insurance, Health Reimbursement Arrangement, Health Benefits

Additional Resources

Trying to decide which HRA is best for you? Take our quiz to find out.
Get our guide on how to offer health benefits with a small budget.