Can a Small Business Offer Health Sharing Rather Than Group Health Insurance?

The renewal notice shows up, and the number is higher again, for the third year in a row. The owner has two options on the table: eat the increase or cut the benefit entirely. Neither one feels right. Small business healthcare doesn’t have to come down to picking the lesser of two bad options. 

More small employers are exploring a middle path: a health sharing membership instead of, or alongside, group insurance coverage. 

Here’s what that actually looks like, and whether it makes sense for your business. 

Do You Even Have to Offer Health Insurance?

Short answer: probably not. Under the Affordable Care Act’s employer shared responsibility provisions, only “applicable large employers” (businesses with 50 or more full-time equivalent employees) are required to offer health insurance to avoid a potential penalty. Below that threshold, there’s no federal mandate requiring you to offer insurance at all. 

That doesn’t mean small employers want to do nothing. Supporting employees with healthcare costs matters for hiring, retention, and doing right by your team. Most small business owners aren’t really asking whether they’re required to offer insurance. They’re asking what they can realistically afford to offer instead. 

Why Group Health Insurance Is So Hard for Small Employers to Sustain

It’s not just a perception. The cost gap between small and large employers shows up in the numbers. According to KFF’s 2025 Employer Health Benefits Survey, the average annual premium for family coverage reached $26,993 in 2025, up 6% year-over-year. Small-firm workers (10–199 employees) carry more of that burden too: they cover 36% of the family premium out of pocket, compared to 23% for workers at large companies. On the single coverage side, small-firm workers face steeper deductibles as well, with 53% carrying a single deductible of $2,000 or more, compared to 28% at large firms. 

That math adds up fast. Only 51% of businesses with 10 to 24 workers offer health benefits at all, and NFIB survey data shows that 98% of small employers who do offer insurance worry the cost will become unsustainable. Health insurance costs have ranked as small business owners’ top concern since 1986. This isn’t a new problem, but it hasn’t gotten any easier. (For a closer look at how these costs break down, see Beyond Premiums: How Health Sharing Can Revolutionize Small Business Healthcare.) 

What Health Sharing Actually Is

Health sharing is not insurance, and it’s not a group health plan. It’s an insurance alternative built as a membership-based community, where members voluntarily contribute each month toward sharing eligible medical expenses among the community. With Zion HealthShare, there’s no underwriting in the insurance sense, no provider network to stay inside of, and no requirement that an employer contribute anything toward it. 

For small businesses, that structure solves a lot of what makes group insurance hard. It’s simpler to set up, there’s no minimum employer contribution, and employees can join or leave on their own schedule rather than being locked into annual enrollment windows.  

When you look at it that way, the decision gets much easier. Most small teams don’t need their benefit to function like insurance. They need something that helps an employee handle a big, unplanned medical bill without derailing their finances. That’s a narrower problem, and it’s the one health sharing is actually built to solve. 

How a Small Business Can Offer Zion HealthShare

This is where Zion HealthShare’s Essential Membership comes in, with an employee health benefits alternative built for exactly this kind of situation. It lets companies, organizations, and even Direct Primary Care practices offer health sharing for employees without taking on a group health insurance policy. A few features that make it workable for small employers specifically: 

• No required employer contribution. Whether to contribute toward employee memberships is entirely the employer’s choice. 
• Low minimum participation. As few as two household memberships can get a business started, so it works for very small teams. 
• Voluntary participation. Nothing is tied to full-time employment status, so it can extend to W-2 and 1099 workers alike. 
• Flexible enrollment. Unlike group insurance’s annual open enrollment window, membership isn’t locked to a single sign-up period each year. 

Essential Memberships start around $84 a month, or about $1,008 a year, well below the $9,211 average total annual premium for single coverage at small firms. Rates vary by age, household tier, selected IUA and additional services, which can include preventive sharing, pharmacy discounts through Zion RxShare, and 24/7 virtual care for businesses that want to build out a more complete package over time. 

What to Clarify Before Offering Health Sharing 

Health sharing is a real option for a lot of small businesses but go in with clear expectations. It isn’t insurance and isn’t ACA-compliant, and functions as a different style of support than a health insurance plan, not a drop-in replacement with identical guarantees. Before rolling it out, review the Member Guidelines and talk with the Zion HealthShare team about setup details specific to your business. For questions about how a membership interacts with your company’s own tax, payroll, or benefits strategy, your tax or legal professional is the right resource. Zion HealthShare can explain how the membership itself works, but company-specific financial decisions are best made with your own advisors. 

The Bottom Line 

Businesses don’t have to choose between an unaffordable renewal and cutting the benefit entirely. Zion HealthShare’s Essential Membership gives small businesses a third option: no required employer contribution, flexible enrollment, and a simple structure that works for teams of almost any size. 

Ready to offer your team a more flexible way to manage healthcare costs? Learn how Zion HealthShare’s Essential Membership helps companies and organizations support employees through affordable, community-based medical cost sharing. Schedule a call with our team.