Small Business Health Insurance in Delaware
Delaware employers with up to 50 employees can offer health benefits three ways: a fully insured small-group plan, an individual coverage HRA that reimburses each employee's own plan, or a QSEHRA for businesses under 50 full-time employees. Which one fits depends on your budget, how many people you cover and how the Delaware small-group market is priced for 2027.
Private health insurance in Delaware
Most people I help in Delaware end up on a private plan, not a Marketplace plan. Private, medically underwritten health insurance is priced on your age, zip code and health instead of your income, so a strong year never raises your premium and there is no tax credit to pay back in April.
Why people leave the Marketplace
- Premiums keep climbing. Delaware Marketplace premiums are rising 16.4% to 16.5% on average for 2027.
- The subsidy cliff. Above 400 percent of the poverty level ($63,840 for one person, $132,000 for a family of four) you pay full price.
- Surprise tax bills. Underestimate your income and you repay the tax credit in April.
- Narrow networks. Many plans are local HMOs or EPOs that need referrals and cover little outside the area.
- High out-of-pocket costs. 2027 out-of-pocket maximums reach $12,000 per person and $24,000 per family.
- One window a year. Outside open enrollment you need a qualifying life event to enroll or switch.
What a private plan does differently
- Start any month. If approved, coverage can begin the first of next month, with no wait for open enrollment.
- Networks that travel. Many private plans use national PPO networks, which can give you in-network doctors outside Delaware too. Networks vary by plan.
- Can cost less than full-price Marketplace plans for some healthy applicants above the subsidy line.
- Accident coverage the Marketplace does not offer. A private plan can be paired with accident coverage, a separate policy. What it includes varies by plan.
- Approval is based on health. You answer health questions, and acceptance is not guaranteed.
With a significant health condition, or income low enough for a large tax credit, a Marketplace plan can be the better fit, and I will tell you if it is. Either way you see both side by side.
Private plans are not ACA Marketplace plans. Benefits, exclusions and pre-existing condition rules differ by plan and by state, so review the plan details before you enroll.
Get a private plan quoteLearn more: coverage not based on income · how underwriting works · private vs Obamacare · PPO plans for individuals · switching from the Marketplace
The Delaware small-group market for 2027
Delaware law, 18 Del. C. section 7202, defines a small employer as one that employed no more than 50 eligible employees on at least half of its working days in the prior quarter, with most of them working in Delaware. For 2027, the Department of Insurance reports that one insurer will offer 33 off-Marketplace small-group plan options at an 18 percent negotiated increase. Rates go through the same review as individual plans, including the Office of Value-Based Health Care Delivery, as the state works on Delaware's high underlying health care costs.
Delaware options and rules for small employers
Delaware ties its income tax to federal adjusted gross income, so ICHRA and QSEHRA reimbursements that are tax-free federally are tax-free on Delaware returns too. With an 18 percent group renewal, comparing an ICHRA against the group plan is worth a look. Employers with fewer than 20 workers must also follow the state's mini-COBRA law: they have 30 days to notify the insurer and the departing employee, and workers can keep coverage for nine months at up to 102 percent of the group rate. Buying through SHOP is generally required to claim the federal small business health care tax credit.
Delaware at a glance for owners and employees
Delaware buyers enroll through HealthCare.gov, while the state certifies plans and runs a reinsurance program approved through 2029 that lowers premiums. Even so, final 2027 individual rates rise about 16.5 percent, and one of the state's three individual-market insurers is leaving, so affected enrollees must choose new plans. Delaware's own continuation law covers employers with 1 to 19 workers for up to nine months, filling the gap below federal COBRA. Short-term plans are limited to three nonrenewable months, among the strictest rules in these states. Small-group plans face an even larger increase than individual plans, about 18 percent, which gives small Delaware employers a reason to compare individual coverage reimbursement against their renewal.
Other Delaware rules to know
- Leaving a small employer: Delaware requires insured group plans of employers with 1 to 19 employees to offer up to nine months of continuation after three months of coverage, at no more than 102 percent of the group rate.
- Short-term plans: Delaware limits short-term plans to three months, with no back-to-back renewals, under its insurance regulation.
- Where to enroll: Delaware uses HealthCare.gov through a state partnership. Open enrollment for 2027 coverage runs November 1, 2026 to January 15, 2027. Private, medically underwritten plans can start the first of any month if approved.
- 2027 rates: individual plans 16.4% to 16.5% on average, small-group plans about 18%. See the Delaware 2027 rate page.
Group plan or HRA
A small-group plan gives everyone the same coverage and usually requires a minimum share of employees to enroll and a minimum employer contribution. An ICHRA lets you set a monthly allowance by employee class and lets each person pick their own individual plan; it works for any size business. A QSEHRA is simpler and capped by annual limits, for employers under 50 full-time employees. Employees offered an affordable ICHRA lose access to the Marketplace tax credit, so set the allowance with that in mind.
Covering the owner
An owner-only business cannot buy a small-group plan in most states; it needs at least one eligible employee who is not an owner or an owner's spouse. Until then the owner buys individual coverage. Once you have employees, you can usually join the group plan or the ICHRA as well.
Tax treatment
Employer contributions to group premiums and HRA reimbursements are generally deductible to the business and tax-free to employees. General information, not tax advice — confirm with your CPA based on your specific entity structure.
For 2027 the Marketplace credit stops at 400 percent of the poverty level: $63,840 for one person, $86,560 for two and $132,000 for a family of four. The out-of-pocket maximum for 2027 Marketplace plans is $12,000 for one person and $24,000 for a family. The full guide covers the rest.
Compare Delaware plans
Licensed in Delaware. Private plans priced first, Marketplace alongside when it fits. No fee.
Delaware questions
Where do Delaware residents enroll in 2027 coverage?
Delaware uses HealthCare.gov through a state partnership. Open enrollment for 2027 coverage runs November 1, 2026 to January 15, 2027.
What continuation rights does Delaware give after leaving a small employer?
Delaware requires insured group plans of employers with 1 to 19 employees to offer up to nine months of continuation after three months of coverage, at no more than 102 percent of the group rate.
How much are Delaware premiums rising for 2027?
Individual-market premiums are set to rise 16.4% to 16.5% on average, and small-group plans about 18%.
How many employees do I need for a small-group health plan?
Usually at least one eligible employee who is not an owner or an owner's spouse. Insurers also set participation and contribution minimums.
What is the difference between an ICHRA and a QSEHRA?
Both reimburse employees for their own individual plans. An ICHRA works for any size employer with no cap and lets you vary amounts by employee class; a QSEHRA is for employers under 50 full-time employees and has annual limits.
Sources: delcode.delaware.gov, news.delaware.gov, delcode.delaware.gov, www.healthcare.gov. Facts checked October 2026. See all Delaware health insurance rules.
Small business in other states
Written by Frank Caballero, licensed health insurance agent in Delaware and 30 other states, NPN 21032307.