Pennsylvania Small Business Health Insurance: Plans, Rules and Costs

By Michael Sprague, Licensed Health Insurance Agent · Reviewed by Heather Sprague, Licensed Health Insurance Agent

Pennsylvania small business health insurance lets you offer coverage to your team through a small group plan, a level-funded plan or a health reimbursement arrangement that helps employees buy their own plans. Pennsylvania small group plans are regulated by the Pennsylvania Insurance Department, and Pennsylvania's Act 2 mini-COBRA covers employers with 2 to 19 employees.

This guide covers Pennsylvania's small group rules, continuation coverage, costs and how to get started before the November 15 to December 15 enrollment window. Call 888-730-6031 for a free quote from a licensed agent.

Pennsylvania Small Group Rules

In Pennsylvania, a small employer for health insurance purposes has 1 to 50 eligible employees. Carriers generally need at least one W-2 employee who is not the owner or the owner's spouse.

Pennsylvania small group plans must cover the ACA essential health benefits. Carriers must accept every small employer and can set rates only by age, rating area and tobacco use. Philadelphia, Pittsburgh and central Pennsylvania are priced in different rating areas.

Carriers usually set participation and employer contribution minimums. Those rules are waived for January 1 coverage when you apply November 15 to December 15.

Options for Pennsylvania Employers

Option	How it works in Pennsylvania
Small group plan	One or more HMO, PPO or EPO plans from a carrier licensed in Pennsylvania.
Level-funded plan	A set monthly cost with possible refunds. Often fits healthy groups of 5 or more.
ICHRA	Employees buy individual plans on Pennie or off-exchange and get reimbursed tax-free.
QSEHRA	For fewer than 50 employees with no group plan. 2026 caps: $6,450 self-only, $13,100 family.
SHOP plan	Needed to claim the small business health care tax credit.

Pennsylvania Continuation Coverage (Mini-COBRA)

Pennsylvania's mini-COBRA law, Act 2 of 2009, covers employers that normally have 2 to 19 employees on a typical business day. Employers with 20 or more follow federal COBRA instead.

Employees and dependents who were covered for at least 3 months can keep the group plan for up to 9 months after a qualifying event such as job loss or reduced hours. There are no extensions, and coverage ends early if the employer drops its group plan.

The former employee pays the full premium, and an administrative fee of up to 5% can be added. When mini-COBRA ends, the loss of coverage opens a special enrollment period on Pennie.

What Small Group Health Insurance Costs in Pennsylvania

Small group premiums in Pennsylvania depend on employee ages, location, plan type and how many family members enroll. Nationally, KFF found an average 2025 premium of $9,211 a year for single coverage and $26,054 for family coverage at firms with 10 to 199 workers.

The only way to know your real price is a quote based on your employee census. See our guide to small business health insurance cost.

Small Business Open Enrollment in Pennsylvania

From November 15 to December 15, Pennsylvania small group carriers waive minimum participation and contribution rules for coverage that starts January 1. It is the easiest time for a small team to start a plan. Read more about small business open enrollment.

ICHRA in Pennsylvania

Pennsylvania employees with an ICHRA shop for individual plans on Pennie, the state marketplace, or directly with insurers. An ICHRA counts as an offer of employer coverage, so employees should report it on their Pennie application.

Compare an ICHRA with a group plan in our ICHRA vs QSEHRA vs group health insurance guide.

How to Start a Pennsylvania Small Group Plan

• Gather your EIN and a recent payroll or state wage report.
• Build an employee census with dates of birth and ZIP codes.
• Decide your budget and what share of premiums you will pay.
• Compare plans, networks and hospitals your team uses.
• Submit the application and first premium before the carrier deadline.

Tax Breaks for Pennsylvania Small Businesses

Premiums you pay for employees are generally deductible. Employers with fewer than 25 full-time equivalent employees and modest average wages may qualify for the small business health care tax credit, worth up to 50% of premiums for two years.

Pennsylvania Small Business Health Insurance: FAQ

How many employees do I need for group health insurance in Pennsylvania?

1 to 50 eligible employees. Most carriers need at least one W-2 employee who is not the owner or the owner's spouse.

Are Pennsylvania employers required to offer health insurance?

No. Only federal ACA rules for employers with 50 or more full-time employees, including equivalents, apply.

Does Pennsylvania have mini-COBRA?

Yes. Act 2 of 2009 gives employees of firms with 2 to 19 workers up to 9 months of continuation coverage at up to 105% of the premium.

Can Pennsylvania employers use an ICHRA?

Yes. Employees buy individual plans through Pennie or directly from insurers.

When can a Pennsylvania small business enroll?

Any month if you meet carrier rules, or November 15 to December 15 without participation and contribution minimums.

Next Steps for Pennsylvania small business health insurance

Start with a headcount, a budget and a census. Then compare a Pennsylvania small group plan with an ICHRA or QSEHRA. For the national overview, see our guide to small business health insurance.

Want a licensed agent to help? Call 888-730-6031, Monday through Friday, 9 a.m. to 6 p.m. Eastern, or request a free quote.

Sources

1. Pennsylvania Insurance Department: Mini-COBRA
2. HealthCare.gov: Small businesses
3. KFF 2025 Employer Health Benefits Survey

Related Guides

• Small business health insurance
• Pennsylvania health insurance
• Small business open enrollment
• Pennsylvania open enrollment

Vivna Insurance is a licensed independent agency, not a government website. Our help is free; we are paid by the insurance companies we work with. Coverage options, deadlines and costs vary by plan and state.