2 Person Group Health Insurance
Jason Stolz CLTC, CRPC
2 Person Group Health Insurance is one of the most overlooked opportunities for small business owners, partners, and family-run companies to save money on health coverage while gaining access to richer benefits. Whether you’re running an LLC with your spouse or managing a small S-Corp with a business partner, establishing a legitimate group plan with just two people can open the door to major tax savings and plan flexibility not available on the individual market.
At Diversified Insurance Brokers, we work with business owners nationwide to design 2-person group plans that fit budgets, meet state requirements, and support long-term employee and family health goals. This guide explains who qualifies, how to set up your plan, and why it often provides a better path than individual or marketplace coverage.
Compare 2-Person Group Health Quotes
We’ll help you compare carriers and show how a 2-person group plan can lower your costs while improving coverage options.
Who Qualifies for a 2 Person Group Health Plan?
Most states allow a business with just two qualified employees to start a group plan. In most cases, this means you need two people working full-time and receiving a consistent paycheck from the business. The business itself can be structured as an LLC, S-Corp, C-Corp, or Partnership. Requirements may vary slightly depending on your state and carrier, but generally include:
- Two full-time employees who are not married (some states allow spouses if both are on payroll).
- Active business entity with EIN and business checking account.
- Proof of income or payroll records for both individuals.
- Employer contribution toward premiums (typically 50% or more).
To confirm your eligibility, we verify details with the carrier and ensure your company meets the minimum participation and contribution rules. Learn more about small business health options by visiting what is self-funded group health insurance.
Key Advantages of 2-Person Group Health Insurance
Group health coverage isn’t just for large employers—it’s one of the best-kept secrets for small operations. Here’s why two-person groups are popular among entrepreneurs, consultants, and family businesses:
- Lower premiums: Group-rated plans can cost less per person than comparable ACA or individual plans.
- Tax-deductible premiums: Employer-paid portions are deductible as business expenses, reducing taxable income.
- Access to richer benefits: Group plans often offer better hospital networks and lower out-of-pocket costs.
- Custom plan designs: Choose between PPO, HMO, or High Deductible Health Plans (HDHPs) with HSA compatibility.
- Family and spousal inclusion: Add dependents or spouses for broader protection at group rates.
Can a 2 Person Group Use Self-Funding?
Yes, in some cases. While most small groups start with fully insured plans, more carriers are offering level-funded or self-funded health plans even for micro groups. These plans combine predictable monthly payments with potential year-end savings if claims are lower than expected. For small companies with stable health histories, this can be a cost-effective hybrid between traditional and self-insured coverage.
How to Compare 2-Person Group Plans
- Gather business details: EIN, entity type, payroll, and ownership structure.
- Estimate budget: Decide how much the business will contribute toward each employee’s premium.
- Compare plan designs: Evaluate deductible levels, copays, and provider networks from multiple carriers.
- Review tax advantages: Employer contributions are deductible; employees’ share may be pre-tax through a Section 125 plan.
- Submit application: Once you select a plan, the carrier verifies eligibility and issues your group policy.
We handle all of these steps for you—saving time while ensuring compliance. For reference, see our pre-retirement planning checklist if you’re evaluating how healthcare fits into a larger transition strategy.
Individual vs. 2-Person Group Health Comparison
| Feature | Individual Plan | 2-Person Group Plan |
|---|---|---|
| Eligibility | Individuals or families | Two or more employees on payroll |
| Premium Cost | Market-based rates | Group rates—often lower per person |
| Tax Deductibility | Limited | Fully deductible for the employer |
| Plan Options | Fewer | Wider selection and network flexibility |
Start Your 2-Person Group Health Plan
Protect your business, your partner, and your families with smarter health coverage and long-term savings.
Related Pages
- Small business group health insurance
- Best group health insurance options for two-person businesses
- Why choose group level funding
- Understanding stop-loss insurance in level-funded plans
- Level-funded health insurance tax benefits explained
- Can 1099s get group level funding
- Can small groups get health insurance refunds
- Top questions employers ask about group health insurance
Talk With an Advisor Today
Choose how you’d like to connect—call or message us, then book a time that works for you.
Schedule here:
calendly.com/jason-dibcompanies/diversified-quotes
Licensed in all 50 states • Fiduciary, family-owned since 1980
FAQs: 2-Person Group Health Insurance
Can two people really start a group health plan?
Yes. Most states allow two employees—such as business partners or owners—to qualify if both are on payroll with earned income.
Can spouses count as two employees?
Sometimes. It depends on the state and carrier rules. Some accept spouses as separate employees if both draw W-2 wages.
Is it cheaper than individual coverage?
Often yes. Group plans are rated differently and may offer stronger coverage at lower overall cost per person.
Can I include dependents?
Yes. Spouses and dependents can be added under group rates, with employer and employee contributions structured to fit budgets.
What if my partner leaves the company?
You can replace that member or convert coverage back to individual plans. Maintaining two active employees is required for group eligibility.
