Group vs. Individual Coverage for Small Law Firms

The five variables.

1. Partner household-income distribution — are any partners subsidy-eligible at the individual marketplace?
2. Staff demographics — do paralegals and administrative staff have spouses with strong employer coverage?
3. Geographic distribution — does the firm operate across state lines where a single group plan poorly fits?
4. Census stability — is the firm net-hiring or net-shrinking in the next twenty-four months?
5. Owner posture — does the firm intend benefits as recruiting differentiation or pure cost-of-doing-business?

When group wins, cleanly.

Group plans win on the math when partner households are uniformly above marketplace subsidy thresholds, when the firm employs ten or more total lives across attorneys and staff, and when the firm is in geographic concentration in one or two states. Under those conditions, the risk-pooling and tax-deductibility of a fully-insured group plan typically outperform any individual stack.

When individual wins, often surprisingly.

Individually-purchased coverage with an ICHRA top-up wins when partner households vary widely in income — particularly when one or two partners would qualify for federal premium tax credits or cost-sharing reductions at the individual level. A subsidized silver-tier ACA plan layered with a $400 monthly ICHRA reimbursement frequently produces materially better net economics than a comparable group plan, while preserving the firm's tax deduction on the reimbursement.

A worked example.

Three-partner family-law firm in Oregon. Partners ages 36, 41, and 48; household incomes $145,000, $310,000, and $95,000 respectively. Two paralegals plus an office manager. The firm previously sponsored a silver-tier group plan at $4,800 per partner per year.

Each partner kept the network they preferred. Partner C's household qualified for a subsidy the group plan structurally excluded. The firm preserved its tax deduction on the ICHRA contribution and the staff dental/vision. The savings funded a long-term disability benefit the firm had not previously been able to underwrite.