WASHINGTON, D.C. (Feb. 19, 2025) – The National Federation of Independent Business (NFIB), the nation’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. The report also highlights the top legislative solutions Congress should enact to provide relief for small businesses.

“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,” said Josselin Castillo, NFIB Principal of Federal Government Relations. “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.”

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:

• 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.

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For 80 years, NFIB has been advocating on behalf of America’s small and independent business owners, both in Washington, D.C., and in all 50 state capitals. NFIB is nonprofit, nonpartisan, and member-driven. Since our founding in 1943, NFIB has been exclusively dedicated to small and independent businesses, and remains so today. For more information, please visit nfib.com.