As Costs Rise, Fewer Small Businesses Are Offering Healthcare

Date: August 05, 2016

A new report shows a troubling trend regarding owners who offer healthcare plans.

There’s a dramatic irony that hangs over Obamacare: It’s been hurting the very group it was intended to help—small businesses. 

As of 2015, only 22.7 percent of businesses with fewer than 10 employees offered health insurance. That’s way down from the peak of 35.6 percent in 2008, according to a new report from the Employee Benefit Research Institute. 

Fight to free small business from harmful regulations. 

Businesses with between 10 and 24 employees saw the number of companies offering health insurance drop from 66.1 percent to 48.9 percent over the same seven-year span, and employers with between 25 and 99 employees experienced a decline from 81.3 percent to 73.5 percent. 

One of the culprits for these losses: the Affordable Care Act.

“The ACA requirements could have convinced many that health plan sponsorship would become a more regulated and expensive benefit—something to stay away from,” according to the study’s findings. 

Rising health insurance premiums have plagued individuals and small business owners alike since Obamacare was passed in March 2010. In California, for example, health insurance premiums are expected to rise 13.2 percent in 2017, more than triple the increase of the previous two years, the Los Angeles Times reported.

“For many smaller employers, the business, labor/employment, and healthcare environments may have all changed the cost-benefit calculation against sponsoring health coverage—greater costs and risks, with reduced differentiating, attraction and retention benefits,” the study found. 

Photo credit: Daniel Borman

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