Small business health insurance in New Mexico

Providing health benefits is essential for attracting and retaining top talent as a small business in New Mexico. Offering the right health coverage helps you stay competitive. But figuring out the best option in The Land of Enchantment can be overwhelming.

If group health insurance feels too costly or complicated, there are flexible, budget-friendly alternatives. See how PeopleKeep and Remodel Health can help you provide your employees with a personalized and affordable health benefit known as a health reimbursement arrangement (HRA).

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Introduction New Mexico small business health insurance information
   
Introduction

New Mexico small business health insurance information

There are almost 30,000 small businesses with fewer than 50 employees in New Mexico1. Yet, only about 24% offer their employees health insurance2.

Many small business owners with limited budgets find it challenging to offer health benefits that will provide their employees with enough value. But don’t worry. There are several affordable and flexible health benefits out there.

This guide explains why offering a comprehensive health benefits package is essential for New Mexico employers. It will also discuss various coverage options, including alternatives to traditional group health insurance.

   
Chapter 1

Overview of small business health insurance in New Mexico

Offering robust medical insurance is a great way to create a positive workplace and show employees you care about their health. Fortunately, small businesses in New Mexico have several options to consider. However, each comes with its own set of pros and cons.

Many small employers assume that traditional group health coverage is their only choice. While familiar to most employees, these plans can be expensive and have minimum participation requirements, making them difficult for smaller teams to obtain.

A flexible and budget-friendly alternative is a defined contribution health plan, like an HRA. With an HRA, businesses of any size can reimburse employees tax-free for eligible medical expenses. Instead of a one-size-fits-all group plan, this provides a more customizable approach to health benefits.

Working through all the ins and outs of the health insurance industry can be confusing. But, researching your options allows you to choose the right health benefits for your business while keeping costs down.

   
Chapter 2

Importance of small business health insurance

Providing health benefits not only supports your employees. It also helps your New Mexico business stay competitive. Below, we’ll highlight some key reasons why offering coverage is a wise investment.

Satisfying the ACA’s employer mandate

If you have fewer than 50 full-time equivalent employees (FTEs), federal law doesn’t require you to offer health insurance. But, the Affordable Care Act requires applicable large employers (ALEs) to follow the employer mandate.

Here’s a brief overview of what the employer mandate requires:

  • Employers with 50 or more FTEs must offer affordable health insurance that meets minimum essential coverage (MEC) to at least 95% of their full-time workers and their dependents. If they don’t and at least one employee buys a health plan with a subsidy on the individual market, the IRS may penalize them.
  • ALEs may also have to pay a tax penalty if their health benefit doesn’t pay for at least 60% of covered medical expenses for the standard population. This requirement is the minimum value requirement of the employer mandate.

Even if your business isn’t legally required to offer insurance, doing so can help you attract and retain talented workers while standing out in your industry.

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Benefits of providing health insurance to employees

Beyond compliance, providing robust health benefits offers several advantages—regardless of whether your company is an ALE.

Providing health benefits has many benefits, including:

  1. Enhancing employee loyalty and retention. When employees feel supported, they’re more likely to stay at your organization. This can reduce turnover and hiring costs.
  2. Attracting top talent. Competitive benefits make your business more appealing to job seekers. Our 2024 Employee Benefits Survey found that 81% of candidates believe that benefits are a key factor when accepting a job. Of the survey respondents, 92% prioritize health insurance.
  3. Improving productivity and well-being. Access to healthcare helps employees stay healthy and focused, leading to fewer sick days and better overall performance.

By offering the right health benefits, you can invest in your team’s well-being while strengthening your business for the future.

   
Chapter 3

Small business health insurance options in New Mexico

Small business owners in New Mexico have multiple ways to provide their employees with health insurance. But, each benefit type has different costs, coverage levels, and customization options. Choosing the right option for your company means understanding what works best for your budget and employees.

Some of the coverage options available to small employers include:

  • Traditional group health insurance
  • Health reimbursement arrangements (HRAs)
  • Self-funded health plans
  • Association health plans (AHPs)
  • Supplemental and ancillary health insurance benefits

Traditional group health insurance

Many small employers opt for group health insurance because it’s a well-known option that allows them to share premium costs with employees for more affordable coverage. Employers can also extend coverage to employees' spouses and dependents to boost job satisfaction.

Common types of group health insurance plans include:

  1. Preferred provider organization plans (PPOs) offer a broad provider network with some coverage for out-of-network care at a higher cost.
  2. Health maintenance organization plans (HMOs) require employees to stay within a network and get referrals for specialists. But they generally have lower premiums.
  3. Exclusive provider organization plans (EPOs) are a hybrid of PPO and HMO plans. They offer network-only coverage, but employees don’t need a referral to see a specialist.
  4. Point of service plans (POSs) require referrals like an HMO. In-network costs are lower for members. But, the plan offers some out-of-network coverage at a higher price.

While larger companies may benefit more from group plans due to lower rates and easier time meeting the 70% participation requirement, smaller employers often struggle with high costs.

In 2024, the average self-only plan premium was $8,951 annually ($746 per month), while family plans averaged $25,572 annually ($2,131 per month)3. Employers typically cover a significant portion of these costs, adding to the financial burden.

Small employers may opt for a high deductible health plan (HDHP) to reduce costs. HDHPs have lower monthly premiums but higher out-of-pocket expenses for employees. This trade-off can place a greater financial strain on workers.

New Mexico small business owners can explore small group health plans. However, Small Business Health Options Program (SHOP) plans are currently unavailable on the state’s health insurance marketplace, BeWellnm. Small employers must contact a New Mexico insurance carrier directly to buy a small group health plan4.

Keep in mind that employers with a small group plan directly from an insurer aren’t eligible for the small business health care tax credit. Typically, small employers must have a SHOP plan to qualify for the subsidy.

According to HealthCare.gov's rate review site, the following health insurance companies offer small group plans in New Mexico in 20255.

Insurance company

Network type

SHOP status

Blue Cross Blue Shield of New Mexico

PPO, HMO

Off-exchange

Presbyterian Health Plan, Inc.

HMO

Off-exchange

Presbyterian Insurance Company, Inc.

PPO

Off-exchange

UnitedHealthcare Insurance Company

  

Off-exchange

UnitedHealthcare of New Mexico, Inc.

  

Off-exchange

Integrated HRAs

Small employers that want to offer group health insurance can enhance benefits and control costs with an integrated HRA. Also known as a group coverage HRA (GCHRA), this benefit is for New Mexico employers of any size that offer group plans. Only employees enrolled in your group health plan can participate in the HRA.

With a GCHRA, you give your employees a monthly allowance that they can use for qualified medical costs. Once they prove they bought an eligible expense, you reimburse them tax-free up to their allowance amount. However, group health plan premiums aren’t eligible for reimbursement.

Eligible expenses include costs the group plan doesn’t cover or fully cover, such as:

  • Deductibles: This is the amount employees must pay out-of-pocket before their insurance carrier starts covering their medical care expenses.
  • Coinsurance: This is the percentage of costs employees must pay for a covered service after meeting their annual deductible.
  • Copays: This is a set dollar amount employees must pay for covered healthcare services and items after receiving care.

A major plus of a GCHRA is that it can meet any organization’s needs and budget. GCHRAs can work with any type of group plan. But they especially pair well with high deductible plans, helping you manage higher deductibles while employers save on premiums.

Unlike other HRAs, GCHRAs don’t have minimum or maximum allowance limits, giving businesses more financial flexibility. Plus, employers can vary allowances and eligibility by seven employee classes for greater customization.

Self-funded health plans

Another option is a self-funded health plan. This type of coverage allows you to create and manage your own group health insurance policy. However, you’re responsible for the financial risk of providing coverage to your employees, including handling claim payouts, administrative expenses, and other fees.

If you want to keep your financial liability low, you can buy stop-loss coverage. You can also opt for a level-funded plan that gives some of your risk to a third-party insurance company. However, the administrative burden and potential for high claims may not be the best choice for small businesses.

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Stand-alone HRAs

For small businesses looking beyond traditional insurance, stand-alone HRAs provide an affordable, customizable way to offer health benefits. Like GCHRAs, stand-alone HRAs let you set a monthly allowance and reimburse your staff for eligible medical costs. But you don’t need to buy group health coverage. Instead, employees choose their preferred individual health plan, and you reimburse them for their premiums and other out-of-pocket costs.

There are two types of stand-alone HRAs:

  1. The individual coverage HRA (ICHRA) is for businesses of all sizes. There are no minimum or maximum contribution limits, so it works for your budget. You can vary allowances and eligibility with employee classes or by family status, such as single. Your staff must have a qualifying form of individual health insurance coverage to participate.
    1. Instead of opting for costly group coverage, ICHRAs can help ALEs meet the ACA’s employer mandate requirements.
  2. The qualified small employer HRA (QSEHRA) is for small employers with fewer than 50 FTEs. It has no minimum contribution limits, but the IRS sets annual maximum limits. Employees must have a healthcare plan with MEC to use the benefit.

Stand-alone HRAs provide a cost-effective way to offer health benefits while allowing employees to choose their preferred plans and better control their health outcomes.

Learn more about the HRAs you can offer with PeopleKeep

Qualified small employer HRA (QSEHRA)

A powerful first-time benefit or alternative to group health insurance made specifically for small employers.

Qualified small employer HRA (QSEHRA)

Individual coverage HRA (ICHRA)

A health benefit that enables employers to cover the individual insurance plans their employees choose.

Individual coverage HRA (ICHRA)

Group coverage HRA (GCHRA)

A health benefit that employers can use to help employees with their out-of-pocket expenses. It pairs with a group plan.

Group coverage HRA (GCHRA)

When comparing individual and group health plans in New Mexico, you can see that individual health insurance coverage is more affordable than employer-sponsored policies.

Below are the monthly premiums for a 50-year-old with a silver plan in some of the most populated New Mexico counties in 2025:

County

Small group coverage

Individual coverage

Lea County

$718

$590

Otero County

$718

$590

San Juan County

$705

$590

Doña Ana County

$663

$590

Bernalillo County

$569

$421

Sandoval County

$569

$421

Valencia County

$569

$421

All table data from Ideon’s 2025 premium comparison map6.

Association health plans

Small businesses and self-employed individuals can join an association health plan (AHP) to leverage collective buying power for more affordable insurance. AHPs allow multiple companies within the same industry or region to purchase coverage as a larger group. This could reduce health insurance costs.

AHPs work similarly to traditional health insurance. However, AHPs don’t have to meet all ACA regulations and aren’t an option for ALEs. There may also be limited coverage options, which may not fully meet all your employees' needs. If an AHP doesn’t provide enough flexibility for your organization, an HRA may be a better option.

Supplemental and ancillary health insurance benefits

Even the best health plans don’t cover everything. Supplemental and ancillary benefits help fill essential coverage gaps and give employees extra financial protection. While most of these benefits don’t provide MEC, you can pair these add-ons with major medical plans or HRAs to create a comprehensive benefits package and support your employees’ well-being.

The following are common ancillary and supplemental health benefits:

  • Critical illness insurance provides financial assistance for severe medical conditions like cancer or a stroke.
  • Accident insurance helps cover medical expenses from unexpected injuries.
  • Vision and dental coverage are stand-alone policies that cover essential care not included in most health plans. HRAs can also reimburse these expenses.
  • Hospital indemnity insurance helps pay for hospital costs that major medical plans may not cover.
  • Health savings accounts (HSAs) are tax-advantaged accounts to which you and your employees can contribute. Employees with HSA-qualified plans can use their HSA funds to save and pay for future medical costs.
  • Healthcare flexible spending accounts (FSAs) allow employees to set aside pre-tax dollars for medical costs. However, health insurance premiums are ineligible expenses.

By offering these additional benefits, you can give employees greater financial security while strengthening yourself as a competitive employer.

    
Chapter 4

Average cost of health insurance in New Mexico

The cost of group health coverage depends on several factors, including:

  • Age
  • Number of enrolled employees
  • Plan type
  • Family size

However, individual health insurance uses different determining factors from group health plans.

The cost of an ACA individual health plan varies by the following criteria:

Below are the average lowest-cost premiums for each metal tier for a 40-year-old in New Mexico, according to 2025 KFF data7.

Average lowest-cost bronze premium

Average lowest-cost silver premium

Average benchmark premium (second-lowest-cost silver plan)

Average lowest-cost gold premium

$454

$500

$515

$407

All current plans sold on the public exchange must meet MEC and provide coverage for the ACA’s essential health benefits. Once an employee reaches their annual out-of-pocket limit for covered medical services, their health insurance company will cover 100% of the cost for the remaining plan year.

Private health insurance exchanges offer ACA-compliant plans and non-ACA-compliant policies, such as supplemental and ancillary benefits.

   
Chapter 5

What plans are available on the individual market in New Mexico?

Individuals and families searching for health insurance plans in New Mexico can use their state-based exchange, beWellnm.com. Almost 54,000 New Mexico residents enrolled in health insurance coverage through the beWellnm during the 2024 Open Enrollment Period.

The following is a list of health insurance carriers offering individual plans in 2025.

Insurance company

On- or off-exchange

Blue Cross Blue Shield of New Mexico

On-exchange

Molina Healthcare of New Mexico, Inc.

On-exchange

Presbyterian Health Plan, Inc.

On-exchange

UnitedHealthcare of New Mexico, Inc.

On-exchange

All table data from HealthCare.gov’s rate review site8.

You can enroll in an individual health plan during the annual Open Enrollment Period, which runs from November 1 through January 15 in New Mexico. If you have a qualifying life event, you’ll trigger a special enrollment period and can choose a new health plan midyear.

Individuals may also qualify for federal premium tax credits. In 2024, roughly 87% of New Mexico residents who enrolled in a plan through beWellnm qualified for subsidies.

   
Chapter 6

COBRA in New Mexico

The federal Consolidated Omnibus Budget Reconciliation Act is available to eligible employees, former employees, and their dependents. It allows these individuals to continue their employer-sponsored health coverage for a certain amount of time after a qualifying event. 

Additionally, New Mexico has a mini-COBRA law that requires small businesses to provide continuation coverage.

Here’s how federal COBRA compares to New Mexico’s mini-COBRA law:

 

Federal COBRA

New Mexico’s Mini-COBRA

Eligibility

Employees who lose their health insurance after experiencing a qualifying event other than serious misconduct may qualify for COBRA. 

Qualifying events for employees include termination of employment (whether voluntary or involuntary) or a reduction of work hours.  

Qualifying events for dependents also include the employee's death, divorce, becoming eligible for Medicare, or the dependent child turning 26.

Employees who lose health coverage after a qualifying event other than gross misconduct may qualify for mini-COBRA.

Qualifying events for employees include termination of employment (whether voluntary or involuntary) or reduced work hours.  

Qualifying events for covered dependents also include the employee's death, divorce, legal separation, and entitlement to Medicare.

Duration

COBRA healthcare coverage typically lasts up to 18 months.

If the qualifying event is the covered employee's death, divorce, legal separation, or entitlement to Medicare, dependents’ coverage can last up to 36 months.   

Coverage is up to 18 months if the employee’s qualifying event was termination of employment or a reduction in work hours. 

Dependents' coverage may extend to 36 months if another qualifying event occurs during the initial 18-month period, such as the employee's death, divorce, legal separation, or Medicare entitlement. 

Affected organizations

Federal COBRA applies to all companies with 20 or more employees that offer fully-insured plans.

Mini-COBRA applies to all employers with two to 19 employees offering fully-insured group plans. 

Cost

The covered employee is responsible for paying the full plan premium. This includes the employer and employee portions of the cost and any administrative fees.

The employees must pay the entire premium, including the employer and employee amounts and administrative fees.
    
Chapter 7

How PeopleKeep and Remodel Health can help New Mexico employers

Are you looking for an affordable and customizable way to offer health benefits? Remodel Health makes it easy. Our HRA administration software helps businesses design and manage health benefits that align with their budget and goals.

With PeopleKeep by Remodel Health, small and mid-sized organizations can:

  • Offer a QSEHRA, ICHRA, or GCHRA, giving employees more flexibility in choosing their health coverage.
  • Customize an HRA to fit your company’s needs while allowing employees to select an affordable plan that works best for them.
  • Streamline administration by handling the paperwork, including reviewing and processing reimbursements.
  • Stay compliant with federal regulations and avoid potential tax penalties.
  • Maintain cost control while ensuring employees have access to quality healthcare.

Once employees receive an invitation to their new benefit, they can explore the platform and shop for individual health insurance plans from their PeopleKeep dashboard.

Already working with an insurance agent or broker? No problem! Your broker can continue supporting your employees with individual health insurance options and assist in managing your benefits. They can even work with us to set up an HRA that fits your business.

Are you a larger organization that requires additional compliance tools and dedicated support? Remodel Health’s ICHRA+ administration solution provides a premium, hands-on experience that can meet all your employees’ needs.

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Ready to enhance your employee benefits?

Get in touch with a Remodel Health HRA specialist who can answer your questions and provide expert guidance, or start building your benefits online.

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Contributors:

Elizabeth W staff photo

Elizabeth Walker

Content Marketing Specialist

Sources: