Small business health insurance in Virginia

Virginia small business health insurance information

There are more than 197,000 small businesses in Virginia with fewer than 50 employees. Yet, only about 36% of these small businesses provide health coverage. This means that small employers who offer health benefits have a significant advantage in enticing local workers to their organization compared to their competitors of the same size.

Still, finding a health benefit that fits your budget and your team’s needs can feel stressful. If traditional health insurance seems unattainable, don’t worry—you still have many alternative options.

This guide explores why offering health benefits is vital for small businesses in Virginia. It outlines a wide range of coverage solutions, including flexible alternatives to traditional group plans.

Topics covered in this guide include:

1. Overview of small business health insurance in Virginia
2. Importance of small business health insurance
3. Small business health insurance in Virginia
4. Average cost of health insurance in Virginia
5. What plans are available on the individual market in Virginia?
6. COBRA in Virginia
7. How PeopleKeep can help

Importance of small business health insurance

Adding health coverage to your employee benefits package can make you stand out as an employer of choice. It also ensures you maintain a healthy staff. Below, we’ll review why providing health benefits is a wise business decision.

The employer mandate

Under federal law, organizations with at least 50 full-time equivalent employees (FTEs) must provide health insurance to their workforce. The Affordable Care Act (ACA) outlines specific rules for businesses of this size, also known as applicable large employers (ALEs).

Here’s an overview of the employer mandate:

1. ALEs must offer affordable health insurance that meets minimum essential coverage (MEC) to at least 95% of their full-time employees and their dependents.
2. To comply with the minimum value requirement, health plans must cover at least 60% of the average medical expenses for a standard population.

Employers who fail to meet either requirement may face tax penalties if at least one employee buys subsidized health coverage through a public exchange.

The ACA doesn’t require businesses and nonprofits with fewer than 50 FTEs to provide health insurance. However, offering health benefits can give you an edge when hiring and retaining top talent in a competitive job market.

Benefits of providing health insurance to employees

Providing health coverage offers significant advantages that extend far beyond compliance with employer mandates.

Here are some benefits of providing robust health benefits:

1. Increasing employee satisfaction and retention. Employees who feel valued and supported are more likely to stay with your organization. Increased satisfaction helps reduce turnover and the expenses of recruiting and training replacements.
2. Attracting quality workers. A robust benefits package is a top priority for job seekers. According to our 2024 Employee Benefits Survey, 81% of employees view benefits as a critical factor when considering a job offer, and 92% specifically prioritize health insurance.
3. Enhancing productivity and well-being. Access to health insurance empowers employees to obtain the care they need, helping them stay more effective at work. Healthier employees tend to take fewer sick days and experience less work-related stress, resulting in stronger job performance.

Simply put, investing in comprehensive health benefits fosters a supportive workplace culture, builds employee loyalty, and boosts team morale.

Small business health insurance options in Virginia

Virginia has many health benefit options, and they all have different pluses and minuses. So, it’s essential to examine each option carefully before selecting one.

Group health insurance in Virginia

Small businesses in Virginia frequently offer group health plans to support their employees. These plans allow employers to share the cost of premiums with their staff, making health coverage more affordable. Employers can also expand the benefit by including coverage for employees' spouses and dependents.

Group health insurance plans generally fall into one of the following categories:

• Preferred provider organization plans (PPOs): PPOs are a popular choice, offering discounted rates within a provider network and coverage for out-of-network care at a higher cost.
• Health maintenance organization plans (HMOs): HMOs utilize a specific network of providers who exclusively serve HMO members or have contracts to provide care.
• Exclusive provider organization plans (EPOs): EPOs have features of both PPOs and HMOs. They require employees to use in-network providers but allow specialist visits without referrals.
• Point of service plans (POSs): POS plans encourage in-network care for lower costs but require referrals from primary care physicians for specialist appointments.

Larger companies often find it easier to secure affordable group health plans since they can distribute risk across a larger employee base, reducing premiums. However, many insurers require at least 70% of eligible employees to enroll, which can be difficult for smaller businesses to meet.

For small businesses, group health insurance can be a significant financial commitment. According to KFF, employers covered an average of 84% of self-only plan premiums and 75% of family plan premiums in 2024. These expenses can add up, especially with a larger workforce.

If you want to get a group health plan, you must know where to buy one. Virginia doesn’t use the federal Small Business Health Options Program (SHOP) Marketplace. However, employers can get a small group health plan through Virginia’s Insurance Marketplace. These cost-effective plans are for Virginia employers with fewer than 50 FTEs. 

Companies with fewer than 25 FTEs who pay an average annual salary of $56,000 or less per employee may also qualify for the small business health care tax credit. To be eligible for the credit, employers must offer SHOP coverage from Virginia’s small business Marketplace. They must also pay at least 50% of their staff’s premiums.

According to HealthCare.gov's rate review site, the following health insurance issuers offer small group plans in Virginia in 2025. The availability of these plans varies by county and geographic rating area.

A KFF survey found that the average annual premium in 2024 was $8,951 for self-only plans (or $746 per month) and $25,572 for family coverage (or $2,131 per month). These high prices may make a group plan too much of a financial hardship for small businesses. 

But group health coverage isn’t your only choice. You have other options if you’re looking for a more financially stable way to provide your employees with health benefit coverage.

Integrated HRAs

If you’re considering a group health insurance plan, you can enhance it with an integrated HRA. Also known as a group coverage HRA (GCHRA), this option is available to Virginia employers of any size who provide a group health plan. However, only employees enrolled in your group health insurance coverage can use the benefit.

With a GCHRA, you give your employees a monthly allowance that they can use for qualified out-of-pocket medical expenses. After submitting proof of eligible costs, employees receive tax-free reimbursements up to their allowance limit. However, premiums aren’t eligible for reimbursement.

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

• Deductibles: The amount employees pay out-of-pocket before insurance begins to cover costs.
• Coinsurance: A percentage of costs employees pay for covered services after meeting their deductible.
• Copays: Fixed fees employees pay for medical services or items after receiving care.

A key benefit of a GCHRA is its adaptability, allowing you to design a plan that aligns with your company’s goals.

Here’s how you can tailor a GCHRA to fit your needs:

• GCHRAs can integrate with any group health plan, but they’re most impactful if combined with a high deductible health plan (HDHP). The HDHP reduces premium costs, while the GCHRA helps employees manage higher deductibles.
• There are no minimum or maximum limits for monthly GCHRA allowances. This gives you the flexibility to set amounts that align with your budget.
• You can vary allowances and eligibility using seven employee classes for extra personalization. 

Offering stand-alone HRAs instead of group health insurance

Instead of providing group health insurance, your employees can enroll in an individual health plan, such as a self-only or family policy.

When comparing group and individual coverage in Virginia, individual health insurance policies are often the more cost-effective option. In fact, silver-tier premiums costs are more affordable than small group coverage in every county in 2025.

Below are the monthly premium costs for a 50-year-old with a silver plan in several Virginia counties in 2025:

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

Luckily, a stand-alone HRA can support your employees no matter what type of qualifying health plan they enroll in. Unlike integrated HRAs, stand-alone HRAs don’t require a group health plan. Instead, they allow you to reimburse employees tax-free for eligible expenses, including premiums for individual health insurance.

Stand-alone HRAs work similarly to integrated HRAs. In most cases, you set a monthly allowance, employees choose their preferred individual health plans, and you reimburse them for premiums and other eligible out-of-pocket expenses.

There are two types of stand-alone HRAs:

Stand-alone HRAs provide small employers in Virginia with a flexible alternative to group health plans. By offering an ICHRA or QSEHRA, you can deliver cost-effective health benefits tailored to your budget while giving employees greater choice and control over their healthcare options.

Association health plans

Association health plans (AHPs) provide an alternative for small businesses and self-employed individuals with fewer than 50 employees. These plans allow companies to band together—often within the same industry, profession, or geographic area—to purchase health insurance as a larger group. By combining resources, AHPs can secure lower premium rates.

While AHPs function similarly to traditional health insurance plans, they aren’t required to comply with all ACA regulations. Unfortunately, this means they’re not a viable option for ALEs. Additionally, AHPs may offer limited coverage options that might not fully meet the healthcare needs of all employees.

Businesses seeking more flexibility and tailored benefits may find an HRA a better option.

Supplemental and ancillary health insurance

Supplemental health benefits are optional perks that can strengthen your employee benefits package. While standard health insurance covers many medical expenses, it doesn’t address everything. Supplemental benefits help fill these gaps by covering specific costs, such as hospital stays or emergency room visits, providing added financial security for your employees.

Remember that most supplemental plans don’t meet MEC requirements under the ACA. However, they’re an excellent way to enhance your existing health insurance offerings.

Additionally, ancillary benefits like dental and vision insurance can improve your benefits package and give employees added peace of mind.

Here are some popular types of supplemental and ancillary benefits:

• Critical illness insurance: This benefit helps cover the costs of severe medical conditions, such as cancer, that traditional health insurance may not fully cover.
• Accident insurance: This plan option provides financial assistance for medical expenses related to covered accidents.
• Vision and dental insurance: Many major medical plans don’t cover these services, making them valuable additions. HRAs can also reimburse these expenses.
• Hospital indemnity insurance: These policies support employees with hospital-related costs that traditional health insurance might not cover.
• Health savings account (HSA): An HSA is an employee-owned savings account where you and your employees can contribute. Employees can use HSA funds on future medical expenses. However, HSAs require employees to have an HSA-qualified health plan.
• Flexible spending account (FSA): An FSA is a pre-tax account that helps employees pay for out-of-pocket medical costs. Unlike an HRA, an FSA doesn’t cover insurance premiums.

By including these supplemental and ancillary health insurance benefits, you can provide your employees with more comprehensive coverage than their major medical plan can offer.

What plans are available on the individual market in Virginia?

Individuals and families in Virginia searching for health coverage have several options on the individual market. Residents can buy a qualified plan on the state’s Marketplace, Virginia's Insurance Marketplace. Roughly 373,039 people enrolled in coverage through the Virginia Healthplanfinder platform during the 2025 Open Enrollment Period.

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

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

You can enroll in a plan during the annual Open Enrollment Period from November 1 through January 15 in Virginia. If you have a qualifying life event, you’ll open a special enrollment period and can choose a plan midyear.

Individuals and families with state-based marketplace plans may also be eligible for premium tax credits. In 2024, 87% of Virginia residents who enrolled in a plan through Virginia's Insurance Marketplace qualified for subsidies.

How PeopleKeep can help Virginia employers

If you’re a small and mid-sized business in Virginia looking for an affordable and flexible way to offer health benefits, PeopleKeep provides an easy-to-use solution. Our HRA management software empowers employers to create and manage personalized health benefit coverage that aligns with their budgets and goals.

With PeopleKeep, you can design an HRA that fits your company’s unique needs, allowing your employees to select their own health plans. Our platform simplifies managing your HRA, helping you control costs while ensuring your team has access to necessary healthcare.

We tackle the administrative work, including reviewing and processing reimbursement claims. With us lending a hand, you’ll save time and can comply with federal regulations. Additionally, our platform lets employees directly compare and enroll in health and ancillary coverage options.

Would you prefer to work with a broker? No problem! Brokers can assist your employees in selecting individual health insurance plans while helping you manage your benefits. Have your broker contact us to get started with an HRA for your team.

PeopleKeep is part of the Remodel Health family, working together to provide innovative health benefits solutions. Remodel Health’s white-glove service, renowned in the large group market, is complemented by PeopleKeep's automated solutions tailored for the small group market. This comprehensive approach ensures we can meet employers' specific needs.