Healthcare costs pressuring small firms
A recent report says rising healthcare costs are adding financial strain on American small‑business owners and should be counted as part of operating expenses once an owner leaves employment. (ijr.com)
Rising health insurance costs are forcing many small U.S. employers to cut elsewhere, and owners who leave salaried jobs are being told to treat coverage as a core business expense. (ijr.com) A Daily Caller News Foundation report published by Independent Journal Review on April 12 said analysts are seeing small firms scrap bonuses, reduce hours, struggle to hire, and in some cases lay off workers as coverage gets more expensive. Tyler Dever of the National Federation of Independent Business said owners are being squeezed between absorbing higher premiums and dropping coverage. (ijr.com) KFF said on September 24, 2025 that small businesses with Affordable Care Act-compliant plans could face a median premium increase of 11% for 2026, based on preliminary filings from 318 insurers in all 50 states and Washington. Insurers in a 16-state sample most often pointed to higher hospital, physician, and prescription drug costs. (kff.org) KFF’s 2025 employer survey found average annual premiums reached $26,993 for family coverage and $9,325 for single coverage. Workers paid an average $6,850 toward family premiums, and the average single-plan deductible was $1,886. (kff.org) Those costs land on a big share of the economy. The Small Business Administration’s Office of Advocacy said on June 30, 2025 that the United States had 36.2 million small businesses, accounting for almost 46% of private-sector employment. (advocacy.sba.gov) The pressure is not limited to firms that already feel flush enough to offer benefits. A National Federation of Independent Business survey said 56% of small employers offered health insurance, with take-up much higher at firms with 30 or more employees than at firms with one to nine workers. (nfib.com) That same survey found 49% of small employers said they had taken lower profits or suffered losses to cover premium increases over the prior five years. Another 98% of employers that offered insurance said they worried the benefit would become unsustainable within five to 10 years. (nfib.com) Business groups are pushing different fixes. Dever said the Trump administration and Congress could expand short-term limited-duration insurance, individual coverage health reimbursement arrangements, association health plans, and health savings account eligibility to give smaller firms more options. (ijr.com) Critics of those approaches have long argued that cheaper, lightly regulated plans can offer skimpier benefits and leave sicker patients in more expensive pools, but the near-term math for owners remains simple: once an entrepreneur no longer gets coverage through an employer, health insurance becomes another line item alongside rent and payroll. (kff.org)
