Health insurance for small business owners with no employees

• 1employee who is not an owner, spouse or family member is the minimum before a business can use SHOP coverage
• $6,450the 2026 QSEHRA maximum for self only coverage, but IRS guidance says a QSEHRA can only go to employees
• $178average monthly marketplace premium after tax credits for 2026, versus $619 before credits, per CMS

Why a one person group plan usually is not available

Owners often ask me for a group plan for their one person LLC. Here is what the federal rules say:

• SHOP group coverage: HealthCare.gov says that if your business has even one employee other than yourself, a spouse, a family member or an owner, you may be able to use SHOP. With no such employee, you cannot.
• CHOICE Arrangements, formerly ICHRAs: HealthCare.gov says employers can generally offer one if they have at least one employee who is not a self employed business owner or the spouse of one. They are for employees only.
• QSEHRAs: IRS Notice 2017-67 says a QSEHRA may only be provided to employees, and a more than 2 percent S corporation shareholder is not treated as an employee for this purpose.

Rules for group plans sold outside SHOP are set state by state. If someone offers you a one person group plan, ask exactly what it is, what law governs it and whether it covers pre-existing conditions before you sign.

What solo owners actually do

You buy an individual plan, on or off the marketplace, and deduct the premiums if you qualify. How the deduction works depends on how your business is set up:

The deduction rules that trip people up

From the IRS instructions for Form 7206:

• The deduction cannot exceed your net earnings from the business under which the plan is established. A loss year means no deduction.
• No deduction for months you were eligible for a subsidized employer plan, through your own job or your spouse's, even if you did not enroll.
• It does not reduce self employment tax. It lowers income tax only.
• Premium tax credits interact with it. If you receive an advance credit on a marketplace plan, IRS Publication 974 explains how to figure both.

The spouse angle

Your spouse matters in two different ways.

If your spouse has a job with benefits, check that plan first. A well subsidized family plan through a spouse's employer is often the cheapest coverage available, and when that is true, you do not need me. Just remember the trade: for months you are eligible for that subsidized plan, you cannot take the self employed deduction on your own policy.

If you are thinking of hiring your spouse, know two things. The IRS says wages you pay a spouse are subject to income tax withholding and Social Security and Medicare taxes. And HealthCare.gov says a spouse does not count as the employee that makes a business eligible for SHOP or a CHOICE Arrangement. Some tax advisers set up other reimbursement arrangements for a spouse who is genuinely employed in the business. Those come with strict rules, the job has to be real, and the design is a CPA's call, not a broker's.

Can a solo owner get a subsidy?

Yes, if your household income qualifies. The marketplace uses your expected net income for the coverage year, which for a solo owner is mostly business profit. For 2027 coverage the credit is available from 100 to 400 percent of the poverty line, which is $15,960 to $63,840 for one person and $33,000 to $132,000 for a family of four. Above 400 percent, there is no credit at all now that the enhanced credits have expired, and starting with 2026 coverage there is no cap on paying back excess credits. Estimate carefully and update your application when profit changes. My subsidy calculator gives a quick read.

If your profit is above the cliff, you are shopping at full price, and plan design matters more than subsidies. Networks, deductibles and whether a gold plan is cheaper than silver in your county become the real decisions. My county pages show 2026 prices for 22 Florida and Texas counties, and in 18 of them the cheapest gold plan cost less than the cheapest silver.

When you hire your first employee

Everything changes once you have a real employee who is not an owner or spouse. SHOP, other small group plans, QSEHRAs and CHOICE Arrangements all become possible. QSEHRAs, for example, are for employers with fewer than 50 full time employees that do not offer a group plan, and HealthCare.gov lists the 2026 maximum at $6,450 for self only coverage and $13,100 for family coverage. I cover those choices on my small business health insurance page.

Bottom line

With no employees, skip the hunt for a group plan. Check a spouse's job plan, then compare individual plans with your real profit estimate, and have your CPA handle the deduction. I'm Carson Hornish, an independent broker in Tampa licensed in 31 states, and solo owners are a big part of my practice. The comparison is free. Here is why a broker costs you nothing, and my broader self employed health insurance guide.

Common questions