What a Five-Person Montana Business Can Actually Do About Health Benefits

If you employ four people, or nine, or nineteen, you have probably had this thought: whatever businesses do about health benefits, it seems to be built for somebody bigger than us. No HR department. No benefits broker on retainer. Just you, a payroll service, and a crew you would like to take care of.

You are the majority, not the exception. Montana has about 35,000 businesses with employees, and roughly 32,000 of them have fewer than 20 people, according to the SBA Office of Advocacy's Montana profile. Two out of three working Montanans draw a paycheck from a small business, the highest share of any state in the country. When people talk about Montana's economy, they are mostly talking about shops like yours.

So here is the practical question, without the sales pitch: what can a business your size actually do?

Start with what you are not required to do

Federal law requires employers with 50 or more full-time equivalent employees to offer coverage. Under 50, there is no mandate. Most owners hear that and stop there, as though the only two options were a full group plan or nothing at all.

The useful part of being under 50 is not permission to skip it. It is that you are eligible for arrangements a bigger company cannot use, and those arrangements do not require you to sponsor a group plan at all.

The tool most owners have never heard of

It is called a QSEHRA, a qualified small employer health reimbursement arrangement. The acronym is ugly and the idea is simple: you decide on a monthly amount, your employees pay for their own care, you reimburse them, and the reimbursement is tax free to them.

No group plan to sponsor. No network to negotiate. No renewal letter.

For 2026 the IRS caps it at $6,450 a year for an employee alone and $13,100 for an employee with a family, which works out to about $537 and $1,091 a month (Revenue Procedure 2025-32, issued October 2025). Those are ceilings, not requirements. You can offer $100 a month. The point is that you choose the number, you know it in advance, and it does not move on you in November.

You do have to offer it on the same terms to everyone in a class of employees, and you do have to collect proof that the money went to health care. A payroll provider or a small HRA administrator handles that part.

A membership can run through it

Proposed federal regulations treat direct primary care membership fees as medical care under Section 213(d) of the tax code, which is the category that makes an expense reimbursable through a QSEHRA or a similar arrangement, per analysis from Groom Law Group. Worth saying plainly: those regulations are still proposed, not final, so this is the direction the rules are pointed rather than settled law. Ask your accountant before you build a plan on it.

What that means in practice is that a crew of five could each have a membership with a local clinic, paid with money you reimburse tax free, without your business ever sponsoring a health plan.

The HSA question, answered honestly

There is a newer wrinkle worth understanding, because it cuts both ways.

Starting in 2026, federal law lets someone keep contributing to a health savings account while having a direct primary care arrangement, which used to be disqualifying. The catch is the definition. The arrangement has to cost no more than $150 a month for one person or $300 for a family, and it cannot include prescription drugs other than vaccines, procedures requiring general anesthesia, or lab work that a primary care office would not normally run (IRS Notice 2026-05, December 2025).

A fuller membership, the kind that folds in medications and labs, sits outside that narrow definition. So the honest version is this: if you already have money in an HSA, you can generally spend it on a membership. But joining a broader membership will likely mean you stop putting new money into that HSA.

For some people that is a fine trade, because the membership is doing the work the HSA was saving up for. For others, especially anyone deliberately building an HSA balance for the long run, it is a real cost worth counting. That one is a conversation with your own tax preparer, not something to decide from a blog post.

What it looks like for a crew of five

Pick an amount you can hold steady for a year. Set up the arrangement through your payroll provider. Let each person choose a clinic near where they actually live, which in Montana might be three towns apart. Their everyday care runs through the membership: the visits, the follow-ups, the call at seven in the morning when a kid wakes up sick.

Then plan for the big stuff separately, because a primary care membership is not insurance and does not pretend to be. Hospital stays, surgery, specialists: those need something else alongside it. Any honest conversation about this model starts there.

Where to start

Look at what a membership costs for the ages and family sizes on your crew, which you can do in a few minutes on our membership page. Find the clinics near your people on our provider list. If you want the longer walk-through for employers, the Montana employer guide covers the comparison in more detail.

And if you would rather just talk it through with somebody who does this in Montana every day, that is what we are here for. No pressure, no jargon.

This article is general information, not medical, legal, or tax advice. A direct primary care membership is not health insurance. Tax rules change and individual situations differ, so please talk with a qualified professional about yours.