One of the most common decisions small business owners face at open enrollment is whether to offer a single plan or give employees a choice. Both approaches have real trade-offs.
The Case for a Single Plan
Simplicity is underrated. When you offer one plan, administration is straightforward, employee communication is clear, and you avoid the confusion that comes with employees comparing options they don’t fully understand.
For very small groups (under 10 employees), a single well-chosen plan often makes the most sense. The group is small enough that you can select something that works for most people and offer a small allowance for anyone who needs to go outside the plan.
The Case for Multiple Options
Employee populations aren’t homogeneous. A 25-year-old single employee has different healthcare needs and financial priorities than a 45-year-old with a family and a chronic condition. Offering both a lower-cost HDHP and a more comprehensive PPO lets employees self-select based on their situation.
Multiple plan options also allow you to control your costs. You can set a defined employer contribution (e.g., “we pay $400/month per employee”) and let employees choose a plan within that budget, with the option to pay more for richer coverage.
The Complications
Multiple plans mean more administrative work: more carrier relationships, more enrollment forms, and more employee questions. It also introduces the “adverse selection” risk — sicker employees gravitate toward richer plans, which can drive up those plan’s costs over time.
The Middle Ground: Two-Tier Offering
Many small businesses land on a two-option structure: one HDHP (lower premium, HSA-eligible) and one traditional plan (higher premium, lower deductible). This covers most employee preference combinations without excessive complexity.
Not sure what structure is right for your group? Let’s talk — Garden State Benefits helps you make this call with actual data about your employee demographics.