Can I form a "Single-Member LLC" to get better health insurance?
- Jonathan Edewards
- 9 hours ago
- 4 min read
Many self-employed business owners wonder if having a Single Member LLC helps them qualify for better health insurance options. This question is often sparked by those spam text messages (which often promise access to a“self-employed Aetna / Cigna / United / PHCS / First Health network / private PPO / nationwide PPO” network) that turn out to be fraudulent*.
In our gig economy, more and more people are experiencing the "joys" of owning their own business, but that means they also have to supply their own health insurance.
So, does forming your own LLC or Corporation get you access to better health plans?
The answer is: not necessarily. Forming a Single Member LLC doesn't give a businessperson access to different health plans, unless the owner also has a W-2 employee in addition to himself or herself.
What gets a person access to more HMO or PPO health plan options is purchasing insurance through your company's GROUP.
"Group Plans" vs "Individual & Family Plans"
Group health insurance is an entirely different market than individual & family health insurance, with more insurance companies offering coverage and many more plans and provider networks to choose from.
(These group plans and networks may not necessarily be less expensive, but because there are so many more options, it is easier to find better value and get access to the doctors and hospitals that you want, possibly at a lower cost. And there may be tax advantages and strategic advantages to offering Employee Benefits.)
A group can be formed by a sole proprietor, partnership, single member LLC, regular LLC, S Corp, C Corp, etc. The entity type really doesn't matter. A group consists of the owner, plus at least one other W2 employee.
There are some nuances to what constitutes an eligible "group," so discuss with an expert broker such as Citrust Insurance Agency if you think your business may qualify.
If you own a business but don't have employees or a business partner (ie, your business does not constitute a "group"), and are not covered by Medicare or Medi-Cal, then you may need to buy an ACA individual or family health insurance plan, which has fewer options (especially PPOs) and can be more expensive.
In California, you can work with a broker (such as Citrust Insurance Agency) to buy individual health insurance through Covered California, or we can help you buy individual insurance directly from an insurance company such as Blue Shield of California or Kaiser or Health Net Ambetter.
Advantages of Group Health Insurance
If your business does consist of a "group", even a small one, this opens many doors for better health insurance options. Here are some key advantages:
Access to more insurance companies
As of 2027, Aetna, United Healthcare, Humana, and Cigna do not offer Individual & Family health insurance plans in the state of California. (This is one red flag that you can help you identify those spam messages promising a nationwide PPO for self-employed business owners as fraudulent). But Aetna, United Healthcare, Humana, and Cigna do offer group plans*, along with Blue Shield of California, Kaiser, Anthem Blue Cross, SHARP, Sutter Health Plan, and others. (Aetna, United Healthcare, Humana, and Cigna also offer Medicare plans, which is also an another entirely separate market from individual and group plans).
Access to more PPO plans; implications for Cedars-Sinai & UCLA
People who have doctors affiliated with some of the more prestigious health systems (such as UCLA, Cedars-Sinai, and City of Hope in Los Angeles County, Scripps in San Diego, and Sutter in Northern California) are often required to have PPO health insurance. HMO plans may not be accepted. Only 2 companies are currently offering PPO medical insurance plans to Individuals & Families in Southern California, so options are limited, but groups have many more options, and even access to HMOs that allow access to Cedars-Sinai and UCLA.
Access to National PPO networks (not just local networks).
Employees who spend time out of state may be able to access in-network providers under some group PPO plans.
Attract and Retain Top Talent through Excellent Employee Benefits
Offering health insurance can help attract and keep good employees, if you are competing for new hires with large employers.
Tax Advantages
Premiums paid for employee health insurance may be deducted from paycheck on a pre-tax basis (with a POP or Section 125 plan in place), reducing FICA and workers compensation premiums. Consult your CPA/tax advisor for full tax implications.
Getting Started: Contact an Independent Health Insurance Broker such as Citrust Insurance Agency
In California, you can work with a broker (such as Citrust Insurance Agency) to set up or compare group plans, or to buy individual health insurance, or to buy a Medicare plan. Typically, there is no additional cost to work with a broker, as we get paid on a commission basis.
The gap between individual and group health insurance has never been wider. While individual plans are shrinking, group options continue to offer the robust PPO networks and national coverage that high-performing teams require. Don’t navigate health insurance alone. Schedule a phone call on our Services page for a free consultation about Employee Benefits Open Enrollment .
Footnotes
This article first appeared in the May 2026 edition of the "Miracle Mile Mirror," which is the newsletter of the the Greater Miracle Mile Chamber of Commerce.
*Aetna CVS (from 2023-2025) and United Healthcare (in 2016) did briefly offer Individual & Family health plans through Covered California that were available in a few counties, but those plans were discontinued.
Humana offers group dental & vision plans to Small Groups in California, and may also offer Large Group plans (101+ employees).
Cigna offers Large Group plans, and also rents out its medical provider network to other small group health plans.
For more information and warnings about the deceptive health care schemes that are often promulgated by spam text messages and high-pressure call centers, see: https://consumer.ftc.gov/consumer-alerts/2026/07/are-you-getting-health-insurance?utm_source=chatgpt.com and and
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