Health insurance is definitely not a “nice-to-have” for small businesses in New York anymore—it has become a strategic investment for talent retention, productivity and business sustainability.
Thanks to the soaring healthcare costs and a labor market that is getting more and more competitive, a New York small business that can offer a health insurance plan that is comprehensive and affordable in 2025 will be able to differentiate itself from the competitors.
Why Health Insurance Matters for NY Small Businesses in 2025
A small business in New York that has less than 50 full-time employees is not required by law to provide health insurance. It should be noted, however, that a health insurance offer brings along great benefits:
- Attract and retain skilled workers
- Reduce absenteeism and increase productivity
- Take advantage of tax savings and credits
A large number of employees see healthcare as the #1 benefit they want, so insurance is a competitive advantage—especially in places like New York City, Buffalo, Rochester, and Albany.
Who Qualifies as a Small Business in NY?
In New York, a small business for insurance purposes is generally defined as:
- Having 1–100 full-time equivalent (FTE) employees
- Operating primarily within New York State
- Offering health insurance to all full-time employees
In New York, sole proprietors, and freelancers, in general, are supported through the individual market plans but, group insurance becomes available once you hire at least one employee.
Types of Health Insurance Plans Available in NY
The following are the most typical plan types available to New York small businesses in 2025:
- Qualified Health Plans (QHPs) via the NY Small Business Marketplace (SHOP)
The New York State of Health Small Business Marketplace provides ACA-compliant plans from leading carriers such as:
- EmblemHealth
- Healthfirst
- Fidelis Care
- BlueCross BlueShield of Western NY
The plans are divided by the levels of coverage and cost-sharing into four tiers: Bronze, Silver, Gold, and Platinum.
Main Benefit: Companies employing fewer than 25 full-time employees may be eligible for federal tax credits of up to 50% of premium contributions if they adhere to certain wage and contribution rules.</
- Private Group Insurance (Off-Exchange Plans)
Of course, you could also collaborate with brokers or insurance companies directly to get group coverage outside the state exchange. These plans typically give you the following advantages:
- Large networks
- More options for plan customization
- Combined coverage for dental, vision, and disability
Best For: That kind of businesses that need to have more providers or work with brokers to create personalized plan designs.
- Level-Funded Plans
Such plans are a mix of guaranteed monthly payments and the advantages of self-funding. If your employees have lower-than-expected claims, your business may receive a year-end refund.
Some carriers providing level-funded plans in NY are:
- Aetna Funding Advantage
- Oxford by UnitedHealthcare
- Cigna Level
Pros:
- Costs that can be predicted monthly
- Compliance with ACA
- Possible savings and refund
- Coverage for stop-loss included
Best For: Small businesses that have 5–100 workers and whose health histories are good.
- Health Reimbursement Arrangements (QSEHRA & Perfect for remote or hybrid teams
- Cooperative or Chamber Plans
Some local chambers of commerce and trade associations provide access to group health plans at discounted rates. While these may have limited networks, they are able to lower premiums for small teams.
2025 Average Health Insurance Costs for NY Small Businesses
Premiums in New York are among the highest in the U.S. due to comprehensive coverage requirements and regional pricing. Here’s what you can expect in 2025:
| Plan Type | Monthly Premium (per employee) | Employer Contribution (avg.) |
| Bronze (high deductible) | $450–$550 | 50–75% |
| Silver | $550–$700 | 50–75% |
| Gold | $700–$850 | 50–80% |
| Level-Funded | $500–$650 | Varies by usage |
| QSEHRA/ICHRA (reimbursement) | Set by employer | Fully reimbursed or capped |
Note: Premiums are community-rated in NY, meaning insurers cannot charge based on health status—making small businesses less exposed to dramatic pricing swings.
Tax Incentives and Cost-Saving Tips
✅ Small Business Health Care Tax Credit
If you:
- Have <25 full-time employees
- Pay average wages of <$56,000/year
- Cover at least 50% of the premium
Then you may qualify for a tax credit that covers up to 50% of your payment.
✅ Deduct Premiums as a Business Expense
Tax authorities treat contributions from the employer to the employee’s health insurance premiums as fully tax-deductible.
✅ Use Section 125 Plans (Cafeteria Plans)
If employees pay their portion of premiums pre-tax, it reduces their taxable income and also results in payroll tax savings for you.
Tips to Choose the Right Plan in 2025
- Know Your Employees’ Needs Survey your team to find out what matters: low premiums, low deductibles, telehealth access, or choice of doctors?
- Set a Clear Budget Most small businesses contribute 50–75% of premiums. Set a per-employee cap if necessary.
- Compare Plans Annually Don’t auto-renew. Work with a broker or use the NY State of Health Marketplace to review options each year.
- Consider Bundled Plans Adding dental, vision, or life insurance can increase satisfaction and often unlock multi-line discounts.
- Use a Broker or Advisor Licensed brokers can access plans both on and off the marketplace, help you with compliance, and may come at no added cost.
Final Thoughts
Getting health insurance in a complicated state like New York can be quite a daunting task, but it doesn’t have to be. Having a good plan, you can manage your expenses, keep your employees happy
Whether you decide to use the NY State of Health marketplace, look for level-funded or QSEHRA options, or work with a broker to compare carriers, there’s a clever solution for every size and stage of business.
In 2025, make your health plan function as efficaciously as your employees—being a strong support for wellness, growth, and financial stability for your business.
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