Gusto sells health insurance through its own licensed benefits advisors, and the plan you buy belongs to your company. A PEO offers benefits through co-employment instead. An independent broker shops the wider market and works alongside Gusto payroll. The right route depends on your headcount, your budget, and how much control you want.

Gusto facts below come from Gusto’s own pages as of October 2026. Plans, carriers, and fees change, so confirm anything you plan to act on.

How Gusto health insurance works

Gusto is a payroll and HR platform. It isn’t a PEO, so your company remains the legal employer and a group health plan is your company’s own policy.1 Gusto’s pages say:

  • Who helps you. Licensed advisors help you compare plans and answer employee questions, and Gusto says it charges no broker fees.2
  • Where it’s available. Health benefits through Gusto are available in all 50 states and D.C.2
  • How many options. Gusto lists coverage “from group plans to health allowances” across 9,000+ plans and 30+ carriers.2
  • What you can buy. Medical, dental, and vision coverage, plus pick-your-cost health reimbursement options, HSAs, FSAs, and life and disability insurance.2
  • What it costs. Gusto’s pricing page says you pay only premiums for health insurance, with no Gusto administration fees.3 You pay for your Gusto payroll plan separately: Simple is $49 a month plus $6 per person, Plus is $80 plus $12, and Premium is $180 plus $22.3
  • How Gusto is paid. Gusto’s broker disclosure says it earns commissions from the sale of insurance products and receives commissions as your ongoing broker.4
  • Bringing your own broker. Gusto says your broker can manage your plans inside Gusto. It costs $6 per eligible employee per month on the Plus plan and is included on Premium.5
  • Workers’ comp. Gusto’s pricing page lists pay-as-you-go workers’ comp through a partner.3

Three ways to buy health insurance when you run payroll on Gusto

A census is the list of your employees with ages, ZIP codes, and who wants coverage. Every route should quote from the same one.

Gusto-placed plan PEO plan Independent-broker plan
Who holds the plan Your company’s own group policy Depends on the PEO’s program; employees are covered through the PEO relationship Your company’s own group policy
Whose group Yours. Small-group rates follow ACA rules, which allow age, location, and tobacco use to set premiums rather than your group’s own claims6 The PEO’s program, which can pool clients; ask how yours is rated Yours, unless the broker also arranges a PEO
Funding options Group plans from Gusto’s carriers, plus Gusto’s health allowance and reimbursement options2 Set by the PEO Fully funded, level-funded, ICHRA, and other structures the market offers
Carrier choice The 30+ carriers Gusto lists, which vary by state2 The PEO’s carriers and plan menu The carriers the broker is appointed with, in the states it’s licensed in
Legal relationship You’re the only employer Co-employment with the PEO You’re the only employer
What happens as you grow The plan stays yours, and you can change plan type or bring a broker Ask the PEO how pricing and plan choices change with headcount A broker can re-shop each renewal and move you to a new structure
Leaving Switch vendors; your policy stays with you Replace the coverage and move payroll back to your own tax ID Change brokers; your policy stays with you

On funding: in a fully funded plan you pay a fixed premium and the carrier carries the claims risk. In a level-funded plan you pay a fixed monthly amount that covers expected claims, fees, and stop-loss insurance (coverage that caps the plan’s claims risk), and a portion of unused claims funds may come back after the plan year, depending on the carrier’s terms.7 Kingsfoil Health’s guidance puts the level-funded sweet spot at 25 to 500+ employees.

When each one fits

A Gusto-placed plan tends to fit when your team is small, your needs are standard, and you want one vendor for payroll and benefits. You get a plan in your own name, a licensed advisor, and deductions that sync with payroll.

A PEO tends to fit when you want HR, payroll taxes, workers’ comp, and benefits bundled into one relationship and you’re comfortable with co-employment. Kingsfoil Health’s guidance puts the PEO sweet spot at 10 to 100+ employees. We partner with PEOs instead of fighting them. If a PEO is best for you, we recommend it. For the legal side, see what a PEO is.

An independent broker plan tends to fit when health insurance has become a large line item and you want more structures compared for your census, with a broker who stays year-round. You can keep Gusto for payroll. See PEO vs independent broker for the longer comparison, and Gusto vs TriNet vs an independent broker for a three-way view.

If you’re in a PEO and want out, read about leaving a PEO. If you’re weighing Gusto against another provider, our Gusto vs Justworks page compares the two on health benefits, and Is Gusto a PEO? explains the legal difference.

How to compare your options

  1. Gather one census. List each employee’s age, ZIP code, and whether they want coverage.
  2. Ask each route for the same plan design. Same deductible, same network type, so the quotes line up.
  3. Ask how each one is paid. Brokers must disclose their expected compensation in writing before new sales, renewals, or changes under the Consolidated Appropriations Act of 2021.
  4. Ask what leaving looks like. The exit differs more between routes than the sales pages suggest.

We run this analysis for every client, free, with no obligation. Kingsfoil Health, a health insurance brokerage for US employers, is paid by commission from carriers and partners, like every broker. We show you all the options: fully funded, level-funded, PEO, ICHRA, and plan design strategies, analyzed for your company.

Want a side-by-side on your own census? We’ll compare a Gusto-placed plan, a PEO, and a broker-placed plan so you can see the trade-offs. Compare your options.

Footnotes

  1. Kingsfoil Health, Is Gusto a PEO?. ↩

  2. Gusto, Health benefits, accessed October 2026. ↩ ↩2 ↩3 ↩4 ↩5 ↩6

  3. Gusto, Pricing, accessed October 2026. ↩ ↩2 ↩3

  4. Gusto, Insurance agency and broker disclosure, accessed October 2026. ↩

  5. Gusto, Broker integration, accessed October 2026. ↩

  6. Justworks, Small Group vs Large Group Health Insurance, July 3, 2026, which describes the ACA adjusted community rating method for small groups. ↩

  7. UnitedHealthcare, What is a level-funded health plan?, accessed October 2026. ↩