A dental office is a small business with an unusual payroll: hygienists who earn close to what some owners take home, assistants and front-desk staff who earn half that, and often an associate dentist who may or may not be an employee at all. Health insurance has to work across that whole spread, and a flat benefit rarely does.
Who the dental practice can cover
Hygienists, assistants and front-desk staff on a W-2 are employees and can be offered a group plan, a QSEHRA or an ICHRA.
Associate dentists are where offices differ. An associate paid on a W-2 is an employee. An associate on an independent-contractor agreement, paid on a 1099, is not, and cannot be put on the practice’s QSEHRA or ICHRA.
Most owner-dentists practice through a professional corporation or PLLC taxed as an S corporation. If you own more than 2%, the premium the practice pays for you is added to your W-2 wages, and you take the self-employed health insurance deduction on your own return.
Three ways to pay for staff
Across the 23 states I work in, median pay for dental hygienists from $59,840 to $106,730, dental assistants from $37,130 to $48,710 and front-desk staff from $30,270 to $40,560 (BLS, May 2024). That spread decides which option works.
A QSEHRA reimburses employees tax-free for individual coverage they buy, up to $6,450 for self-only and $13,100 for family coverage in 2026. It is for employers with fewer than 50 full-time-equivalent employees that offer no group plan, it has to be offered on the same terms to every eligible employee, and a shareholder owning more than 2% of an S corporation cannot use it.
An ICHRA — HealthCare.gov now calls it a CHOICE Arrangement, though the IRS still uses the old name — has no cap and no size limit. You set amounts by class of employee (full-time, part-time, seasonal, salaried, hourly, location and a few others), and within a class the amount can rise with age, up to 3 to 1, and with family size. Employees must be enrolled in individual coverage to use it. An offer that leaves the lowest-cost Silver plan costing an employee more than 9.96% of household income in 2026 is unaffordable, and that employee can decline it and take a premium tax credit.
A small-group plan puts everyone on one policy and one network, with participation and contribution minimums set by the insurer. It is still the right answer when the team is older or someone needs a specific specialist network, and it is the only route to the Small Business Health Care Tax Credit, which runs through SHOP.
The wage spread
An ICHRA lets you vary the amount by class of employee, by age and by family size, but not by salary alone. That matters in a dental office: an amount that makes the offer “affordable” for a hygienist can fall short for an assistant earning half as much, and an unaffordable offer leaves that assistant choosing between your money and a premium tax credit. Hourly and salaried staff can be separate classes, and so can full-time and part-time hygienists, which is usually the cleaner way to fund them differently.
What works for different firms
- Owner plus four staff. Owner on an individual policy through the S corporation’s payroll; staff on a QSEHRA. Simple and capped.
- Two locations, part-time hygienists. An ICHRA with full-time and part-time classes, and location classes if the offices sit in different rating areas.
- Associate on a 1099. They buy their own coverage. If you want to help, it has to be through their contract, not a health arrangement.
What changed in 2026
Three things matter to anyone in a dental practice. The enhanced premium tax credits ended, so subsidies stop again at 400% of the poverty line: $62,600 for one person and $128,600 for a family of four. Starting with the 2026 tax year there is no cap on paying back excess advance subsidy, which falls hardest on anyone whose income moves around. And bronze and catastrophic plans now count as HSA-eligible, so an owner on a bronze plan can put $4,400, or $8,750 for a family, into an HSA.
Dental Practices by state
- Alabama
- Arkansas
- Colorado
- Florida
- Georgia
- Illinois
- Indiana
- Kansas
- Maryland
- Michigan
- Mississippi
- Nebraska
- Nevada
- North Carolina
- Ohio
- Oklahoma
- South Carolina
- South Dakota
- Tennessee
- Texas
- Utah
- Virginia
- Wisconsin
Sources: HealthCare.gov, CHOICE Arrangements (formerly individual coverage HRAs); IRS Notice 2017-67, Qualified Small Employer HRAs; IRS Publication 15-B (2026), Employer’s Tax Guide to Fringe Benefits; IRS, S corporation compensation and medical insurance issues; IRS, Instructions for Form 7206, Self-Employed Health Insurance Deduction; IRS, One Big Beautiful Bill provisions; IRS Notice 2026-5, Expanded availability of health savings accounts; U.S. Bureau of Labor Statistics, Occupational Employment and Wage Statistics, May 2024.
Questions owners ask
Can a dental practice reimburse hygienists for their own health insurance?
Yes. A QSEHRA reimburses up to $6,450 for self-only coverage in 2026 if the practice has fewer than 50 full-time-equivalent employees and no group plan. An ICHRA has no cap and can set different amounts for full-time and part-time hygienists.
Can the owner-dentist use the practice’s QSEHRA?
Not if they own more than 2% of an S corporation. The IRS treats a 2% shareholder like a partner for fringe benefits, so the premium goes on the owner’s W-2 and is deducted on their own return.
Are 1099 associate dentists covered by the practice’s plan?
No. A QSEHRA or ICHRA is only for employees. An associate paid as an independent contractor buys their own coverage.