What employers & small businesses need to know when choosing health insurance in Illinois

Offering Illinois health insurance to your small business employees not only helps you attract and retain top talent as an employer — you also get to do right by your hardworking employees. Navigating the complexities of managing health insurance benefits for your workforce can feel overwhelming at first. It helps to understand how federal health insurance laws apply to your business, how you can pursue a healthcare plan, and how coverage works. 

To learn more about small business health insurance in Illinois, keep reading. 

What is small business health insurance?

Small business health insurance is coverage designed to help small businesses ensure their workers have access to necessary medical care. Often referred to as employer-sponsored healthcare coverage, these policies are available in all states, including Illinois.

To find the right Illinois small business health insurance, you can work with a health insurance broker or a PEO partner. If you want to pursue coverage on your own, you can use the Healthcare.gov search engine to narrow down your search for a plan that works for your small business. 

Health insurance basics

Illinois (like many states) is powered by small businesses, with 1.2 million enterprises making up 99.6% of all businesses in the Prairie State. These small businesses employ 2.5 million people — which amounts to 44.7% of Illinois's workforce. (U.S. Small Business Administration Office of Advocacy) This means you are far from alone in your search for a great small business health insurance plan for your workforce. 

Employers in all states, including Illinois, have to follow a specific set of rules and regulations when it comes to health insurance. In all states, if your business employs fewer than 50 employees (full-time and full-time equivalent workers), you aren’t legally required to offer healthcare coverage to your workforce. 

On the flip side, if you employ enough people to meet that mandate, you have a few different coverage options available to you. You may be able to choose from Individual Coverage Health Reimbursement Arrangements (ICHRAs), Small Business Health Options Programs (SHOPs), health reimbursement arrangements (HRAs), or health savings accounts. Your business may even qualify for a health plan with tax advantages.

Finding the right small business health insurance plan

Finding the perfect healthcare plan for your small business is a balancing act, as meeting all your priorities—deductibles, premiums, coverage options, network size, and employee needs—can be challenging. While comparing different group plans is one approach, it’s also worth considering ICHRAs. ICHRAs allow employees to choose their own plans while giving employers cost control and flexibility, potentially solving some of the challenges associated with selecting a single group plan. 

If you’re struggling to balance health insurance pricing with your employee needs, you may want to look into the Small Business Health Care Tax Credit. If your business qualifies for this tax credit, you may be able to save up to 35% (non-profit employers) to 50% on employee premiums. 

To be eligible for this tax credit, you must:

• Enroll in a SHOP plan

• Employ fewer than 25 full-time equivalent (FTE) employees

• Cover 50% or more of the premium costs for your FTE employees

• Pay your employees an average salary of around $56,000 or less per year

• Offer SHOP coverage to all full-time employees (you are not obligated to provide it to dependents or part-time employees who work fewer than 30 hours per week)

Types of Illinois Health Insurance Plans Available

There is no one right healthcare plan type for all businesses. These are some potential options that may work for your Illinois small business. 

• ICHRAs: ICHRAs provide a flexible alternative to traditional group plans by allowing employers to reimburse employees for individual health insurance premiums and medical expenses. This gives employees the freedom to choose a plan that best fits their needs while helping employers maintain cost control and predictability.

• PPOs (Preferred Provider Organizations): PPOs allow the freedom to see specialists without referrals and cover some out-of-network care at higher costs. These plans typically have higher premiums and out-of-pocket expenses.

• HMOs (Health Maintenance Organizations): HMOs focus on preventive care and require you to see a primary care provider (PCP) for referrals to specialists. They usually cost less out-of-pocket but have smaller networks of doctors.

• EPOs (Exclusive Provider Organizations): EPOs offer lower premiums and flexibility within the network but don’t cover out-of-network care, except in emergencies. They’re a good fit if you’re okay with sticking to in-network providers.

• HDHPs (High Deductible Health Plans) with HSAs (Health Savings Accounts): HDHPs have low premiums and pair with HSAs, offering tax advantages and encouraging smart healthcare spending. However, you’ll pay more out-of-pocket until you meet the high deductible.

• Indemnity Plans: Indemnity plans let you choose any provider without referrals. They offer predictable costs for covered services but usually have higher premiums and require more reimbursement paperwork.

How to enroll in small business health insurance in Illinois

Between 2019 and 2021, approximately 960,000 adults in Illinois — about 10.1% of the state's population — reported medical debt yearly. This is higher than the national average of 8.6%. You don’t want your Illinois employees to share those struggles. 

To help protect your employees’ health and finances, you can enroll your small business in a health insurance plan. The good news is, you don’t have to wait for an Open Enrollment Period. You can start providing health coverage to your employees whenever it suits your business. 

Legal obligations of small business owners

Illinois businesses must follow all health insurance rules and regulations. For instance, if you offer a healthcare plan to any eligible employees, you must extend the same coverage to all other eligible staff members. You must also provide every eligible employee with a Summary of Benefits and Coverage (SBC) form, which outlines key details about costs and coverage. (HealthCare.gov) These rules and regulations can change over time, so those working in benefits administration need to stay on top of any changes so your business remains compliant. 

Resources and support

In Illinois, 6.2% of residents lack health insurance coverage, which is slightly better than the national average of 7.9%. (United States Census Bureau) However, there is still room for improvement. To provide your employees with the healthcare coverage they deserve.

Use free resources on Healthcare.gov to simplify the process of offering healthcare to your employees. For more personalized support, request a free demo with Thatch to explore ways to save an average of $1,620 per employee annually. This will help you offer quality healthcare coverage while staying within your budget.

Learn more about choosing health insurance in:

• Health insurance in Arizona

• Health insurance in Colorado

• Health insurance in Georgia

• Health insurance in Texas

• Health insurance in Florida