How many small businesses are in Tennessee, and what do they look like?
Tennessee has about 741,000 small businesses, and small businesses employ 1.2 million Tennesseans, 41.5% of the state's employees, according to the SBA's 2025 profile. About 104,000 of them have employees, and those are the ones that can buy a group plan.
| Size of business | Number in Tennessee |
|---|---|
| No employees | 637,340 |
| 1 to 19 employees | 88,881 |
| 20 to 499 employees | 14,975 |
| All small businesses (fewer than 500 employees) | 741,196 |
Of the Tennessee businesses with employees, 88,881 have 1 to 19 and 14,975 have 20 to 499. Businesses under 20 employees are generally outside federal COBRA, which makes the continuation question below worth planning for.
About 637,000 Tennessee small businesses have no employees. Their owners buy individual plans, and our self-employed guide covers the deduction and enrollment dates.
How many Tennessee small businesses offer health insurance?
A little over one in four Tennessee establishments at firms with fewer than 50 employees offered health insurance in 2025 (28.7%), compared with 32.1% nationally. At firms with 50 or more employees, 97.7% did, compared with 94.8% nationally.
- Firms with fewer than 50 employees
- Firms with 50 or more employees
- TennesseeFirms with fewer than 50 employees: 28.7%Firms with 50 or more employees: 97.7%
- United StatesFirms with fewer than 50 employees: 32.1%Firms with 50 or more employees: 94.8%
Source: KFF State Health Facts, from the AHRQ Medical Expenditure Panel Survey Insurance Component, 2025
The survey counts establishments, meaning individual business locations. If you want to help your team pay for coverage without a group plan, a CHOICE arrangement or a QSEHRA is another route.
Which industries have the most Tennessee small employers?
Other services has the most Tennessee employers with 1 to 19 employees, at 12,717, followed by retail trade at 12,213 and construction at 10,388.
| Industry | Businesses with 1 to 19 employees |
|---|---|
| Other services (except public administration) | 12,717 |
| Retail trade | 12,213 |
| Construction | 10,388 |
| Professional, scientific and technical services | 9,733 |
| Health care and social assistance | 8,602 |
| All industries | 88,881 |
Construction and retail teams often mix full time, part time and seasonal workers. The federal rules count hours, so a mixed team can land on either side of the 25 employee tax credit limit or the 50 employee mandate. Our calculator shows where you stand.
What happens to an employee's coverage when they leave a Tennessee small business?
Federal COBRA covers employers with at least 20 employees, and Tennessee no longer has its own continuation law to fill the gap. Tennessee repealed its law on continuing terminated group coverage, Tennessee Code section 56-7-2312, effective April 11, 2025.
That means employees of a Tennessee business with fewer than 20 workers cannot count on a state continuation right. The repealed law had given a person who was insured for at least three months a few more months of group coverage.
Before an employee leaves, ask your insurer what options the person would have. Losing job based coverage opens a special enrollment period to buy an individual plan on the Marketplace.
What does small business health insurance cost in Tennessee?
KFF does not publish premiums by state, so the closest figure for a Tennessee business is the South region, where the 2026 average premium is $9,272 for single coverage and $26,702 for family coverage. Both are a little lower than the averages for all firms nationally, $9,804 and $28,303.
Your price depends on your employees, their ages and where they live, and the plan level you choose. A quote is the only way to know it. Our cost guide explains who pays what and how to lower the bill.
How do I get started in Tennessee?
Count your team, decide your contribution, then compare a group plan with a fixed budget option. The rules in our national guide apply in Tennessee, and the numbers above show what is local.
- Count your full time and full time equivalent employees. Our free calculator does it for you.
- Decide how much of each employee's premium you want to pay.
- Ask for a side by side quote: a small group plan and, if you prefer a set budget, a CHOICE arrangement or QSEHRA.
- Check the Small Business Health Care Tax Credit. It is a federal credit, so it applies in Tennessee as it does everywhere.
If you are the only person in the business, or you work with only your spouse, you buy an individual plan instead. Our self-employed guide covers it.
See our Small-Group Health plans
Real health benefits for a small team. We handle shopping, setup and renewals.Small business health insurance calculator: employee count and tax credit
Enter your full-time and part-time employees to see your full-time equivalent count, which rules apply to you and what the small business health care tax credit could be worth.Health insurance in Tennessee
Marketplace, Medicaid and Medicare rules for the whole state.
Get group plan prices for your team
A licensed agent compares small group plans and CHOICE arrangements from several carriers and shows you the monthly cost for you and your employees. It costs you nothing.