- Small employers below the full-time-equivalent threshold are not required to offer coverage
- The SHOP marketplace and a possible tax credit exist for very small employers
- A QSEHRA or ICHRA lets you reimburse individual premiums instead of buying a group plan, which is often cheaper and simpler
- Retirement plans have become easier for small employers, and some states now mandate offering something
- Benefits are a recruitment argument as much as a compliance one
A group plan is the expensive route and at six people your rates are poor.
A QSEHRA is usually the better fit. You set a monthly amount, they buy their own plan on the individual market, you reimburse tax-free. You control the cost exactly, and there is no group underwriting.
Retirement is cheaper than you think and increasingly expected. Recent rules made small-employer plans much easier.
If people are leaving for benefits, a QSEHRA at a modest monthly figure closes most of that gap for less than a group plan. Want me to cost it?
Advanced engine. It reframed a cost question as a retention one and named the cheaper instrument.
The employer mandate
The ACA's employer rules apply when you averaged at least 50 full-time employees, counting full-time equivalents, in the preceding calendar year. At 50 or more you must offer affordable minimum-value coverage to at least 95% of full-time staff or risk the 4980H payment, and file Forms 1094-C and 1095-C. Businesses under common ownership count together, so a group of small sites can cross 50 sooner than it expects. As of Oct 2026.
IRC sec. 4980H; 26 CFR 54.4980H-2
State retirement mandates
If you offer no retirement plan, some states make you register for theirs. CalSavers covers California employers with 1 or more employees. Illinois Secure Choice covers 5 or more Illinois employees. New York Secure Choice applies to employers with at least 10 New York employees throughout the previous year that have been in business at least 2 years. Texas and Florida have no mandate. As of Oct 2026.
Cal. Gov. Code sec. 100000 and following; 820 ILCS 80; New York Secure Choice (New York State law)
The simplest plan for a small team
For 2026, a SIMPLE IRA employer with 25 or fewer employees generally uses the increased deferral limit of $18,100; the basic limit is $17,000. Your contribution is generally a 3% match or a 2% nonelective contribution, and it must be your only plan that year. As of Oct 2026.
IRC sec. 408(p)(2)(E); IRS Notice 2025-67
| 3% match on a $40,000 salary | $1,200 |
| 3% match on a $45,000 salary | $1,350 |
| 3% match on a $50,000 salary | $1,500 |
| Your match for the year | $4,050 |
| The 2% nonelective alternative | $2,700 |
2% of all three salaries, paid whether or not they defer. Cheaper when everyone defers, and it reaches the people who would not.
Individual coverage is less subsidized in 2026. The enhanced premium tax credits applied through 2025 coverage only, so for 2026 the credit again stops at 400% of the federal poverty line unless Congress acts (As of Oct 2026). Worth knowing if your people would buy their own plans.
I have [how many] employees in [state] and currently offer [what, if anything]. Compare my realistic options for health coverage and retirement, including cost to me, and tell me what would matter most to the people I am trying to hire.
Every lesson ends with a question to hand to a Greymill specialist, who answers with what it knows about your business.