Soaring Small Business Health Insurance Premiums to Continue Rising in 2016

Date: November 18, 2015

New survey shows two out of three small business owners paid more for health insurance this past year—and 2016 will be even pricier.

Nearly two-thirds of small business owners are forking over more per employee in health insurance premiums than they did last year, according to a new nationwide survey by the NFIB Research Foundation. And those costs are about to get even higher.

An average 8-percent hike will hit premiums under every tier of exchange-based health insurance in 2016, TheStreet reported, citing data from and Northeastern University health policy professor Timothy Hoff.

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Next year’s increases will affect more small businesses than ever. A new Obamacare rule requires businesses with 50 or more full-time equivalent employees (FTE) to pay a flat fee of $2,000 per worker, excluding the first 30, if they do not offer health insurance to at least 95 percent of their FTE workforce and dependents up to age 26.

Costly premiums are to blame for 52 percent of non-covering employers, according to NFIB’s survey of 900 small business owners. Eight percent of respondents with 50 or more employees said they do not currently cover health insurance. Next year, though, they’ll have to choose between footing the newly hiked bill and paying the Obamacare price.

“The Affordable Care Act may be providing some relief to certain Americans, but small business owners are largely not among them,” said NFIB Research Director Holly Wade.

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Believe it or not, it gets worse: As of July 1, 2015, businesses offering reimbursements for their employees’ individual market health plans—a popular alternative for those who can’t afford to fully cover their staff—face fines of up to $100 per employee, per day. One in six small business owners currently violates this rule, according to NFIB’s survey.

Deductibles are going up next year, too. More than half of exchange-based insurance plans in many states have deductibles of $3,000 or more, a New York Times survey found.

“If you look at how [Obamacare] unfolded over the years, everything we predicted is coming true,” Senate Majority Leader Mitch McConnell told The Fiscal Times. “Higher premiums, higher co-payments, higher deductibles, lost jobs.”

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