For a solo business owner, the cheapest option is usually an individual ACA marketplace plan with a premium tax credit plus the self-employed health insurance deduction. If you have employees, an ICHRA or QSEHRA is often cheaper than a traditional group plan because you control the budget and avoid participation minimums.
When Florida small business owners ask me about the cheapest health insurance option, my first question back is always: cheapest in what way? The monthly premium is just one number. The deductible, out-of-pocket maximum, and how often you actually use your coverage all determine your real annual cost. A $200/month plan with a $9,000 deductible isn’t cheap if you’re going to the doctor regularly — it’s a financial trap. Let’s walk through every legitimate option, what each actually costs, and who each one makes sense for.
Option 1: ACA Marketplace Individual Plan (Most Often the Winner)
If you’re a sole proprietor or single-member LLC with no employees, the ACA marketplace at healthcare.gov is almost always your cheapest starting point — and it’s not close. Why? Two layers of cost reduction stack on top of each other.
First, if your household income is between 100% and 400% of the federal poverty level (about $15,960 to $63,840 for a single person), income-based premium tax credits can substantially reduce your monthly premium. Second, the self-employed health insurance deduction (Schedule 1) lets you deduct the premiums you pay from your adjusted gross income, which reduces your income tax (it does not reduce self-employment tax). That double benefit makes the ACA marketplace very competitive for solo business owners. Note that the enhanced subsidies expired after 2025, so if your income is above 400% FPL you’ll pay full price and should compare off-exchange ACA plans too.
Florida carriers on the marketplace for 2027 include Florida Blue, Ambetter from Sunshine Health, Oscar, UnitedHealthcare, AvMed, AmeriHealth Caritas, and 22 Health — availability varies by county. Cigna and Molina are leaving Florida’s individual market for 2027, so if you’re with either, you’ll need to pick a new plan.
Option 2: ICHRA (Individual Coverage HRA)
If you have employees, an ICHRA — Individual Coverage Health Reimbursement Arrangement — is worth serious consideration. Instead of purchasing a group plan with all its overhead, minimum participation rules, and unpredictable renewal increases, you set a fixed monthly dollar amount that you reimburse employees tax-free for their own individual marketplace plan costs.
The advantages for the business are significant. Your monthly contribution is entirely predictable. There are no minimum participation requirements — even if only one employee wants to participate, you’re fine. And 100% of your contributions are deductible business expenses. Employees choose whatever plan fits their situation on healthcare.gov, including whether they want the subsidy (they can’t double-dip — if you offer an ICHRA that is affordable, they aren’t eligible for the marketplace subsidy for that month’s coverage).
Option 3: Small Group Bronze Plan
Small group plans (typically for 2-50 employees) give everyone access to employer-sponsored coverage, which has its own advantages — including the employer contribution being fully deductible and excluded from the employee’s taxable income. The Bronze tier is the lowest-premium group option.
Bronze plans carry higher deductibles — often several thousand dollars per person — but they pair well with a Health Savings Account (HSA) if the plan is HSA-qualified. Employees fund the HSA with pre-tax dollars to cover that deductible gap (2026 limits: $4,400 self-only, $8,750 family). Learn more in what’s a high-deductible health plan and is it right for my business. This structure works best when your workforce skews younger and healthier and your team is comfortable with a higher-deductible tradeoff for a lower payroll deduction.
One important note: Florida group carriers typically require that at least 70% of eligible employees participate. If you have a team of five and two decline coverage, you may fall below the minimum. Your broker needs to check this before you commit to a group plan.
Option 4: QSEHRA (Qualified Small Employer HRA)
The QSEHRA is the small-business-specific version of a reimbursement arrangement, designed for employers with fewer than 50 full-time equivalent employees that don’t currently offer a group health plan. For 2026, the IRS limits are $6,450 per year for self-only coverage and $13,100 per year for family coverage (the limits adjust annually).
Like the ICHRA, your reimbursements are tax-free to employees and fully deductible as a business expense. The difference is that the QSEHRA has annual dollar caps and can’t be offered alongside a group plan. For a very small team — two, three, four people — where a group plan would be prohibitively expensive or impossible to meet participation minimums, a QSEHRA can be the cleanest solution.
Option 5: Health Sharing Plans — Proceed With Caution
Health sharing ministries and cost-sharing plans advertise monthly share amounts significantly lower than insurance premiums. They are not ACA-compliant insurance. There is no guaranteed payment for your medical bills — members vote on whether to cover your costs. Pre-existing conditions are commonly excluded, often permanently. There is no state insurance department oversight for disputes.
For a small business owner where personal income and business finances are tightly linked, a serious medical event that a health sharing plan declines to cover could be financially catastrophic. I see these most often as a last resort for someone who genuinely cannot afford insurance and has no subsidy eligibility — not as a strategic cost-cutting move.
The Subsidy Cliff: A Sole Proprietor’s Hidden Lever
If you’re a sole proprietor, your marketplace subsidy eligibility is based on your net self-employment income — not gross revenue. Business deductions (vehicle, home office, equipment, etc.) reduce your net income, which increases your subsidy eligibility. This creates a genuine planning opportunity: working with a tax professional to legitimately maximize your deductions can meaningfully reduce what you pay for health insurance. A shift in net income can meaningfully change your premium tax credit — and if it moves you from above to below 400% FPL, the difference can be dramatic, because the subsidy cliff is back for 2026 and 2027.
On the flip side, if you dramatically underestimate your income and receive more subsidy than you’re entitled to, you’ll repay the difference at tax time. Accurate income estimation — with a mid-year update if things change significantly — is important.
Always Factor In the Tax Deduction
Regardless of which structure you choose, the tax treatment matters. Employer contributions to group plans are deductible and excluded from employee W-2 income. ICHRA and QSEHRA reimbursements are deductible and tax-free to employees. The self-employed health insurance deduction on a marketplace plan reduces your income tax. When you compare options, compare after-tax cost — not the sticker price. Our guide to how much small business health insurance actually costs can help you benchmark.
Frequently Asked Questions
What is the cheapest health insurance for a one-person business?
Usually an individual ACA plan bought through HealthCare.gov, especially if your household income is between 100% and 400% FPL and you qualify for a premium tax credit. You can also deduct the premiums you pay on Schedule 1. Above 400% FPL there’s no credit, so compare on- and off-exchange plans and consider an HSA-eligible plan.
Is an ICHRA or QSEHRA cheaper than a group plan?
Often, yes, for very small teams. Both let you set a fixed, tax-free reimbursement budget with no participation minimums. A QSEHRA is capped for 2026 at $6,450 self-only and $13,100 family and is limited to employers under 50 employees. An ICHRA has no cap. Florida small-group rates are proposed to rise about 11.4% on average for 2027.
Are health sharing plans a cheap alternative to insurance?
They can have lower monthly costs, but health sharing ministries are not insurance. There’s no guarantee your bills will be paid, pre-existing conditions are commonly excluded, and they lack ACA protections and state insurance oversight. For a business owner whose personal finances are tied to the business, that risk can be serious.
Does the self-employed health insurance deduction lower self-employment tax?
No. The deduction reduces your adjusted gross income and therefore your income tax, but self-employment tax is calculated on net earnings before this deduction. The deduction also can’t exceed your net self-employment income and isn’t allowed for months you were eligible for a subsidized employer plan, including a spouse’s.
If you’re ready for a real after-tax cost comparison of marketplace, ICHRA, QSEHRA, and group options for your business, a short conversation before 2027 renewals can save you real money. Michael McAllister, owner of Choice Health Insurance Brokers in DeLand, is a licensed broker appointed with 200 carriers (NPN 18229135) and there is no cost to work with him. Call or text 321-230-9536 or visit choice.healthcare to get started.