The National Federation of Independent Business (NFIB), Minnesota’s leading small business advocacy organization, released a new health care policy paper entitled, “Addressing the Health Insurance Affordability Crisis for Small Businesses.” The findings reveal a dire prognosis for the small-group insurance market as employer-provided health coverage is becoming unsustainable for millions of small businesses and their employees. 

“Minnesota’s small businesses are watching their options disappear as the small-group market enrollment has plunged 44% since 2014,” said NFIB Minnesota State Director Jon Boesche. “With 98% of small business owners concerned about maintaining health coverage in the next five years, legislators must act on NFIB’s recommendations to make coverage affordable for Minnesota small businesses and their employees.”

Key findings from the report:

• The small-group market is in freefall, with enrollment plummeting from 15 million individuals in 2014 to just 8.5 million in 2023, a 44% drop.
• Average premiums for small businesses have skyrocketed: Average single plan premiums have gone up 120% in the last two decades, while average family plan premiums have increased by 129% for firms with 50 or fewer employees.
• Only 30% of small businesses still offer health insurance, down from nearly 50% in 2000.
• Ninety-eight percent of small businesses say they are concerned about whether they will be able to afford to continue offering health insurance in the next five years.
• Small businesses pay twice as much for health insurance as large businesses, firms with less than $600,000 in revenue spend nearly 12% of payroll on health benefits, compared to 7% for firms with over $2.4 million in revenue.

Legislative recommendations include:

• Provide full funding for the Minnesota Premium Security Plan (“Reinsurance”)
• Require the State of Minnesota to defray the costs of newly mandated health benefits.
• Protect Employer-Sponsored Insurance
• Support Small Businesses with Targeted Health Insurance Tax Credits
• Expand Individual Coverage Health Reimbursement Arrangements (ICHRAs)
• Improve Employer Pooling Arrangements
• Expand Access to Health Savings Accounts (HSAs)
• Protect Small Businesses’ Access to Stop-Loss Insurance
• Expand Affordable Coverage Options
• Eliminate One-Size-Fits-All Mandates That Drive Up Premium Costs and Limit Competition
• Promote Price Transparency and Price Certainty
• Discourage Hospital Consolidation
• Reduce Prescription Drug Prices Through Innovation

View “Addressing the Health Insurance Affordability Crisis for Small Businesses” here.