Running a small business in California comes with many challenges—hiring top talent, managing costs, and staying compliant with state and federal regulations. One of the biggest decisions you’ll face is whether to offer health insurance to your employees.
A strong group health plan is more than just a benefit—it’s a powerful tool that can help you attract and retain employees, improve workplace productivity, and even provide tax savings. However, choosing the right plan can feel overwhelming with all the options available.
At Skyline Benefit, we specialize in helping small businesses navigate affordable, ACA-compliant health insurance plans that fit their budget and workforce needs. Whether you’re a startup or an established business, this blog will help you explore California’s best small business health insurance options for 2025.
Who Qualifies for Small Business Health Insurance in California?
To be eligible for a small business health insurance plan, your business must meet the following criteria:
- At least one employee – The business must have at least one W-2 employee who is not the owner or spouse, working at least 30 hours per week.
- Employer contribution – Employers must cover at least 50% of the employee’s health insurance premium.
- Minimum participation – At least 70% of eligible employees must enroll in the plan unless they have other qualifying coverage.
If your business meets these conditions, you can access affordable group health insurance plans with tax advantages.
Are Small Businesses Required to Offer Health Insurance in California?
The Affordable Care Act (ACA) does not require businesses with fewer than 50 full-time employees to offer health insurance. However, there are several reasons why small businesses should consider providing coverage:
- Attract & Retain Employees – Competitive benefits make your business more appealing to job seekers.
- Tax Savings – Employer contributions to health plans are typically tax-deductible.
- Increased Productivity – Employees with access to healthcare take fewer sick days.
- Coverage for Business Owners – Small business owners can enroll in the same group plan as their employees.
Health insurance is mandatory under the ACA for businesses with 50 or more employees.
Best Small Business Health Insurance Plans in California
At Skyline Benefit, we work with top insurance carriers to provide businesses with a variety of group health insurance options. Here are the most popular plans for 2025:
1. PPO (Preferred Provider Organization) Plans
- More provider flexibility – See any doctor or specialist without referrals.
- Covers both in-network and out-of-network care.
- Ideal for businesses looking for wider provider access.
2. HMO (Health Maintenance Organization) Plans
- Lower monthly premiums and predictable costs.
- Requires employees to select a Primary Care Physician (PCP).
- Covers only in-network care, except for emergencies.
- Best for businesses seeking cost-effective coverage.
3. EPO (Exclusive Provider Organization) Plans
- No referrals needed for specialists.
- Employees must use in-network providers for coverage.
- A balance between affordability and provider choice.
How to Choose the Right Small Business Health Insurance Plan
When selecting a health plan for your business, consider these key factors:
- Budget: Compare premiums, deductibles, and employer contribution requirements.
- Employee Needs: Do your employees prefer low-cost HMO plans or flexible PPO options?
- Provider Networks: Ensure the plan includes doctors and hospitals your employees use.
- Tax Benefits: Employer contributions may be tax-deductible, and small business tax credits may apply.
Need help with Small Business Health Insurance in California?
Skyline Benefit is an independent health insurance broker in Fullerton, CA, that offers affordable and flexible group health insurance options. Selecting the best group health insurance plans can be overwhelming; our mission is to simplify the process and help our clients every step of the way.
Schedule a consultation today. Call us at: (714) 888-5112