Your Insurance Detective › Delaware › Small business health insurance
Small Business Health Insurance in Delaware: What Does It Cost, What Is Required, and Which Plan Fits My Team?
Written and reviewed by Dick Tracy, licensed health insurance broker (NPN 20414610) · Published October 3, 2026
Quick answer Delaware does not require a business with fewer than 50 full-time equivalent employees to offer health insurance, and there is no penalty for skipping it. At 50 or more, the federal employer mandate applies. Delaware law defines a small employer as a business with no more than 50 eligible employees, and small group coverage asks no health questions. Average employer coverage in Delaware costs $9,459 a year for single coverage and $25,600 for a family (MEPS-IC, 2025, all firm sizes). One company files small group rates in Delaware, and the state approved an average 18.0% increase for 2027, after 19.5% for 2026. A group plan is not the only way to take care of your people. I educate, you decide.
I'm Dick Tracy, a health insurance broker. I'm licensed in Delaware (NPN 20414610), one of 25 states I hold a license in, and I work with 80+ carriers. I am not local and I won't pretend to be: my office is in Buffalo, New York, and I work with Delaware business owners by phone or Zoom. I came from the healthcare side of this business, so there is no gag clause on me. This page is for the owner with employees. If it is just you, or you and your spouse, start with my self-employed in Delaware page instead. The biggest trap for an owner with a team: signing the first group quote because you think it is the only option. Sometimes the math doesn't math.
employer" under Delaware law
coverage, Delaware, 2025
rate change, after +19.5% for 2026
Sources: Delaware Code, Title 18, Chapter 72, section 7202; AHRQ MEPS-IC via KFF State Health Facts, 2025; Delaware Department of Insurance, 2027 small group (non-Marketplace) rate filing.
Small business health insurance requirements in Delaware: do I have to offer it?
Under 50 full-time equivalent employees (FTEs), no. The federal duty to offer coverage starts at "an average of at least 50 full-time employees (including full-time-equivalent employees)" in the prior year (IRS). Part-time hours count toward that number, so do the count before you assume you are under it.
| Your size | Required to offer? | What applies to you |
|---|---|---|
| Owner only, or owner and spouse | No | A group plan is the carrier's call. See the box below. |
| 1 to 49 FTEs | No, and no penalty | Small group coverage is available if you want it. So are two other routes. |
| 50 FTEs or more | Yes, federal mandate | The 2026 penalties and the affordability test below. |
Sources: 18 Del. C. section 7202 (small employer: "employed no more than 50 eligible employees, the majority of whom were employed within this State"); IRS, employer shared responsibility provisions.
At 50 or more, the 2027 IRS numbers: the penalty for not offering coverage is $3,780 per full-time employee for the year. The penalty when the coverage you offer is unaffordable or falls short is $5,670 per affected employee (IRS Rev. Proc. 2026-22). For 2026 those were $3,340 and $5,010 (IRS Rev. Proc. 2025-26). "Affordable" has a number too: for 2027 plan years it is 10.22% (IRS Rev. Proc. 2026-26), and for 2026 plan years, the employee's required contribution cannot be more than 9.96% of household income (IRS Rev. Proc. 2025-25). If you are near the line, my employer affordability calculator does the math.
Who counts for a Delaware group plan: the law says an eligible employee "works on a full-time basis and has a normal work week of 30 or more hours." Part-time, temporary, and substitute workers are not eligible employees under that definition.
Business owner with no employees: the rule that surprises people
Delaware's definition of an eligible employee "includes a sole proprietor, a partner of a partnership and an independent contractor" when that person is included as an employee under a small employer's health plan. The same law takes owners back out for any plan bought through a state exchange or SHOP (18 Del. C. section 7202). Federal rules add that an owner and spouse are not employees of a business they wholly own (29 CFR 2510.3-3). So whether a company of one gets a group policy is the carrier's call, and with one company on the state's 2027 small group rate filing list, you do not get to shop the answer. Get it in writing.
What can that owner do instead? First, a pre-established ERISA group plan: a solo owner is merged into a group plan that already exists, with group rates, a true nationwide PPO network of the PHCS and MultiPlan type, and a policy you own. No employees required. Here is the ERISA cheat code, explained. Second, a customized individual plan built around you. The four doors for a solo owner are on my self-employed in Delaware page, and the Wilmington page walks through the same doors for New Castle County.
How much does small business health insurance cost in Delaware?
Here is the honest anchor: average annual premiums for private-sector employer coverage in Delaware, from the federal employer survey. They cover employers of all sizes, so this is a benchmark, not a quote.
| Coverage tier (2025) | Delaware total | Employee pays | Employer pays | US total |
|---|---|---|---|---|
| Single | $9,459 | $2,120 | $7,339 | $9,025 |
| Employee-plus-one | $17,997 | $5,084 | $12,913 | $17,901 |
| Family | $25,600 | $6,993 | $18,607 | $26,281 |
Source: Agency for Healthcare Research and Quality, Medical Expenditure Panel Survey Insurance Component (MEPS-IC), via KFF State Health Facts, data year 2025: single, employee-plus-one, family. All firm sizes, per enrolled employee.
In monthly terms, single coverage runs about $788, with the employee paying about $177 of it. Family coverage runs about $2,133 a month, with the employee paying about $583. Delaware runs about 5% above the national average for single coverage and about 3% below it for family. The employer still carries about $7,339 a year per person on single coverage alone.
What does the employer have to contribute? The number comes from the carrier, and Delaware law puts guardrails on it. A carrier's "requirements for minimum participation of eligible employees" must be "applied uniformly among all small employers with the same number of eligible employees." It cannot raise a participation or contribution requirement on you after you have contracted for coverage. And an employee who shows coverage "through a spouse or other qualifying existing coverage" is not counted against your participation (18 Del. C. section 7207). A carrier can decline to renew a group that stops meeting its participation or contribution rule (section 7206), so get that rule in writing before you quote. My advice on a group plan: pick a flat dollar amount per person, not a percentage of premium, as long as it clears the company's contribution minimum. If you want the tax credit, the IRS requires a uniform percentage of at least 50%. Every employee is rated on their own age, so a percentage means your cost jumps with every older hire and every renewal. A flat amount is a number you can budget.
Delaware small group rates for 2027: what the state approved
Small group rates in Delaware are filed with the Department of Insurance every year. For plan year 2027 the Department lists one company with small group filings, and no small group plans on the Marketplace (Delaware Department of Insurance, health insurance rate filings). That company asked for an average increase of 19.80%. The state approved 18.00%, effective January 1, 2027. The year before, the request was 22.73% and the state approved 19.50%.
| Highmark Blue Cross Blue Shield, small group (non-Marketplace) | Average requested | Average approved | Effective |
|---|---|---|---|
| Plan year 2026 | 22.73% | 19.50% | January 1, 2026 |
| Plan year 2027 | 19.80% | 18.00% | January 1, 2027 |
Sources: Delaware Department of Insurance rate filing pages for 2026 small group (non-Marketplace) plans and 2027 small group (non-Marketplace) plans. The company is named because it is the only one in the state's table, not as a recommendation.
The Department's September 4, 2026 announcement describes the 2027 small group lineup as "thirty-three plan options" at "an 18% negotiated increase" (State of Delaware News). Stack the two approved averages and the increase is about 41% over two years. A $788 monthly premium that followed both averages would be about $1,111. That is my arithmetic on the averages, not a quote, and your own renewal will differ with your plan and your ages.
How a small group plan is priced: no health questions. Under the federal rating rule (45 CFR 147.102) the premium can vary only by age, rating area, family size, and tobacco use, never by health or claims history. The oldest adult rate can be no more than three times the youngest. A young, healthy team gets credit for being young and zero credit for being healthy, which is why a small group quote is often too expensive for them. When there is one company on the state's small group rate filing list and two straight approved increases near 20%, looking outside the traditional small group box is just good homework.
Delaware small business health insurance plans: the three routes I use
There is no single best plan, only a best route for your team. What kind of tank should we build?
| 1. Traditional fully insured small group | 2. Pre-established ERISA group plan | 3. No group plan at all | |
|---|---|---|---|
| What it is | A Delaware small group policy from a carrier | Your people merge into a group plan that already exists under ERISA | You may not need a group plan at all: I customize the plan based on the situation |
| Who can use it | A business with at least one employee besides the owner and spouse. A company of one is the carrier's call. | A solo owner or a small business's people. No employees required. | The owner and family, or each person buying their own policy |
| Health questions | None. Guaranteed issue. | Best fit for healthy people | Depends on the plan. Marketplace plans ask none. |
| Network | Depends on the plan | True nationwide PPO (PHCS and MultiPlan type) | Chosen person by person, around their own doctors |
| Employer rules | Carrier participation and contribution minimums. Federal COBRA at 20 or more employees, Delaware Mini-COBRA below that. | One simple compliance step I walk you through. | No group plan to administer. Each person owns their own policy. Call me and I walk you through it. |
| Policy owner | The employer holds the group contract | The person | The person |
| Usually fits | Older teams, teams with health conditions, owners who want one plan for everyone | Healthy owners and healthy small teams | Very small businesses, owner-and-spouse businesses, teams where half want coverage and half do not |
Small group column: 18 Del. C. Chapter 72, 45 CFR 147.104 (guaranteed availability). Routes 2 and 3 describe my own practice; route 2 is explained on the ERISA cheat code page.
On route 3: a group plan is one design stretched over a 26-year-old who never sees a doctor and a 58-year-old with a specialist. Customized individual coverage for each person is often more cost-effective than a one-size-fits-all group plan, especially for a young, healthy crew of 2 to 15. A couple of years ago I saved a business over $30,000 in a year by putting the routes side by side.
Wilmington, Dover, or the beaches: does my county change the price?
Not in Delaware. The federal rule prices a small group by the rating area of the business's principal address, and all three Delaware counties sit in one rating area.
| County | Rating area |
|---|---|
| New Castle (Wilmington, Newark) | Rating Area 1 |
| Kent (Dover) | Rating Area 1 |
| Sussex (Georgetown, the beaches) | Rating Area 1 |
Sources: CMS, Delaware geographic rating areas; 45 CFR 147.102 ("in the small group market, using the group policyholder's principal business address").
So a shop in Wilmington and a shop in Rehoboth Beach start from the same rate table. Looking for affordable small business health coverage in Delaware? The county does not make a plan affordable. The route does. I don't have a Delaware office, and I won't build a fake page for every town. One page, real numbers, and a phone or Zoom call when you want your own.
Cheap small business health insurance in Delaware: which situation are you in?
Two to fifteen employees, mostly young and healthy, owner has a budget
Price routes 2 and 3 against a traditional group quote. Put all three on one page. On a young team the group plan is often the most expensive of the three.
An older team, or someone with a serious diagnosis in the last five years
Guaranteed-issue coverage, for now. Traditional small group asks no health questions and cannot charge more for a condition. We revisit the other routes at renewal.
Half the team is on a spouse's plan and the rest want coverage
Check the carrier's participation rule before you quote. Delaware law says an employee who shows coverage through a spouse is not counted against you. If you still cannot meet the rule, federal rules give a small employer an annual window, November 15 through December 15, when a carrier has to take the group anyway (45 CFR 147.104). Routes 2 and 3 cover only the people who want it, with no participation test.
Lower-wage team, mostly part-time or 1099
A group plan may not fit, and I will tell you so. For a lower-income worker, a subsidized marketplace plan or Medicaid may be the best deal available. The trade-offs: they have to check the network for their doctors, and the income estimate has to be right.
SHOP and the small business tax credit in Delaware: the reality
SHOP is the federal small business side of the Marketplace. The Delaware Department of Insurance's 2027 rate filing page lists small group Marketplace plans as "No Marketplace Plans Available." The small group plans filed for 2027 are sold off the Marketplace only.
That matters for the Small Business Health Care Tax Credit. The IRS rules: fewer than 25 FTEs, average wages under an inflation-adjusted limit (under the 2026 formula the credit starts to shrink once average wages pass $34,100 and is gone at double that, per IRS Rev. Proc. 2025-32), and a uniform employer contribution of at least 50% of the premium. The maximum credit is 50% of premiums paid (35% for a tax-exempt employer), it shrinks above 10 FTEs, and it can be claimed for only two consecutive tax years. The catch: the coverage generally has to be "a qualified health plan offered through a Small Business Health Options Program (SHOP) Marketplace" (IRS Form 8941 instructions). No SHOP plans, no credit for most Delaware employers. The instructions carry relief only for an employer that properly claimed the credit the year before. Ask your tax professional before you count on it.
Sources: Delaware Department of Insurance, health insurance rate filings (Health, Small Group Plans, Marketplace Plans: "No Marketplace Plans Available"); IRS Instructions for Form 8941 (2025).
When someone leaves: COBRA and Delaware Mini-COBRA
A group plan comes with an exit rule. Federal COBRA "generally requires that group health plans sponsored by employers with 20 or more employees in the prior year" offer a temporary extension of coverage to people who leave (U.S. Department of Labor). Under 20, Delaware fills the gap with its own law, titled Mini-COBRA. It applies to an employer "that normally employed between 1 and 19 employees on a typical business day during the preceding year."
| Delaware Mini-COBRA | What the law says |
|---|---|
| How long | Up to 9 months after the coverage would have ended |
| What it can cost the person | No more than 102% of the group rate |
| Who qualifies | Someone continuously insured under the group policy for the 3 months before the coverage ended |
| The clocks | The employer gives notice within 30 days of the qualifying event. The person elects within 30 days of that notice. |
| Who is left out | Someone covered by or eligible for Medicare, or who is or could be covered by another group arrangement |
Source: 18 Del. C. section 3571F, Mini-COBRA small employer group health policies.
That is a duty on the group policy and a notice job for you as the employer. On routes 2 and 3 the person owns the policy, so ask me how leaving the company works on each one.
Common questions about small business health insurance in Delaware
Is a small business in Delaware required to offer health insurance?
Not under 50 full-time equivalent employees, and there is no penalty for skipping it. At 50 or more, the federal employer mandate applies. For 2027 the IRS penalties are $3,780 per full-time employee for not offering coverage and $5,670 when the coverage is unaffordable or falls short (for 2026: $3,340 and $5,010). Affordable means the employee's required contribution is no more than 10.22% of household income for 2027 plan years (9.96% for 2026).
How much does small business health insurance cost in Delaware?
For 2025, the federal MEPS-IC employer survey put the average annual premium for employer coverage in Delaware at $9,459 for single, $17,997 for employee-plus-one, and $25,600 for family. Employees paid an average of $2,120 of the single premium and $6,993 of the family premium. Those averages cover employers of all sizes, so treat them as a benchmark, not a quote.
How much are Delaware small group health insurance rates going up for 2027?
The Delaware Department of Insurance approved an average 18.0% increase for small group plans effective January 1, 2027. The company asked for 19.8%. For 2026 the approved average was 19.5%, after a 22.73% request. The Department lists one company with small group filings for 2027, and none of its small group plans are sold on the Marketplace.
How many employees do I need for a small group plan in Delaware?
Delaware law defines a small employer as a business with no more than 50 eligible employees, most of them employed in Delaware. An eligible employee works full time with a normal week of 30 or more hours. The law can count a sole proprietor or partner who is included in the plan, but federal rules say an owner and spouse are not employees of a business they wholly own, so ask the carrier in writing before you count on a group plan for a company of one.
Do I have to pay a percentage of my employees' premiums in Delaware?
The number comes from the carrier. Delaware law lets a carrier set minimum participation and minimum employer contribution requirements, but it must apply them the same way to every small employer of the same size and cannot raise them after you have contracted for coverage. An employee who shows coverage through a spouse is not counted against your participation. Get the carrier's rule in writing.
Can a Delaware small business claim the small business health care tax credit?
For most Delaware employers, no. The IRS generally requires a qualified health plan offered through a SHOP Marketplace, and the Delaware Department of Insurance lists no Marketplace small group plans for 2027. The Form 8941 instructions carry relief only for an employer that properly claimed the credit the year before. Ask your tax professional.
What happens to an employee's coverage when they leave a small Delaware business?
Federal COBRA generally applies to employers with 20 or more employees. Below that, Delaware has its own rule, often called Mini-COBRA, for employers that normally had 1 to 19 employees. A person who was covered for the prior three months can keep the group coverage for up to 9 months and can be charged no more than 102% of the group rate.
What is the cheapest way to cover a small team in Delaware?
It depends on the team. A small group plan cannot price on health, so a young, healthy crew pays the pool's average, and a pre-established ERISA group plan or customized individual plans often cost less. An older team, or one with a serious diagnosis, usually belongs in a traditional fully insured small group plan. Put all three routes side by side before you sign.
Thirty minutes on the phone or Zoom, no fee, no hard sell. Bring your headcount, ages, and what you spend on coverage now. I put a traditional small group plan, the pre-established ERISA group plan, and the no-group route side by side with real numbers. I educate, you decide.
Grab a time right here
Pick a slot below and it lands on both our calendars. Phone or Zoom, plan documents on the screen, real numbers side by side. I educate, you decide.