The National Federation of Independent Business (NFIB) has released a health care policy paper titled "Addressing the Health Insurance Affordability Crisis for Small Businesses." The report indicates that employer-provided health coverage is becoming unsustainable for many small businesses and their employees. It also outlines legislative solutions that Congress should consider to provide relief.
Josselin Castillo, NFIB Principal of Federal Government Relations, stated, “For nearly four decades, health insurance costs have been the number one concern for small business owners, and we are now at a breaking point. The small-group market is collapsing, premiums are unsustainable, and small businesses are being forced to make difficult choices. Without immediate and targeted policy reforms, millions of Americans may lose access to employer-sponsored health coverage.”
The report's key findings include a significant decline in the small-group market enrollment from 15 million individuals in 2014 to 8.5 million in 2023—a 44% drop. Average premiums for single plans have increased by 120% over two decades, while family plan premiums have risen by 129% for firms with fewer than 50 employees. Only 30% of small businesses currently offer health insurance compared to nearly half in 2000. Furthermore, almost all small businesses express concern about affording health insurance over the next five years.
Small businesses face higher costs than larger ones; those with less than $600,000 in revenue spend nearly twice as much on payroll for health benefits compared to larger firms.
Legislative recommendations from NFIB include protecting employer-sponsored insurance, supporting small businesses with targeted tax credits, expanding individual coverage health reimbursement arrangements (ICHRAs), improving employer pooling arrangements, expanding access to Health Savings Accounts (HSAs), protecting access to stop-loss insurance for small businesses, expanding affordable coverage options, eliminating mandates that increase premium costs and limit competition, promoting price transparency and certainty, discouraging hospital consolidation, and reducing prescription drug prices through innovation.
For more information on this issue or to view the full report titled "Addressing the Health Insurance Affordability Crisis for Small Businesses," visit nfib.com.
