The National Federation of Independent Business (NFIB), Indiana’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.

“Health insurance costs have been the number one concern for small business owners for nearly four decades – and there are no signs of improvement,” said Natalie Robinson, NFIB Indiana State Director. “Small business owners are being forced to make difficult choices for their business and employees due to the skyrocketing costs and the collapsing small-group market. Indiana lawmakers have an opportunity to support pro-small business health insurance legislation this session that would immediately help small employers.”

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.

Indiana legislative recommendations include:

• HB 1003 – Health Matters. This legislation is a main priority for NFIB members and NFIB’s Natalie Robinson has testified in support of the bill. HB 1003 would lower health care costs for small businesses by reforming the prior authorization process, addresses prescription drug pricing, gives additional strength to pricing transparency, addresses site neutral pricing, and prohibits all-or-nothing contracts.
• HB 1004 – Nonprofit Hospitals. This legislation limits what may constitute community benefits for certain nonprofit hospitals and would examine what nonprofit hospitals are charging services compared to the Medicare reimbursement rate. NFIB supports HB 1004 as it brings much-needed reform to the excessively high hospital costs.
• HB 1604 – Out-of-Pocket Expense Credit. The legislation requires a health plan to credit toward a covered individual’s deductible and annual maximum out-of-pocket expenses any amount the covered individual pays directly to any health care provider for a medically necessary covered health care service if a claim for the health care services is not submitted to the health plan. NFIB testified in support of HB 1604.

Other legislation NFIB supports: SB 3, Fiduciary Duty in Health Plan Administration, SB 118 – 340B Drug Program Report, SB 119 – Certificate of Public Advantage, and SB 147 Physicians Referrals and Reimbursement Rates.

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