New Research About Small Businesses Offering – and Not Offering – Health Insurance

April 5, 2023 Last Edit: March 20, 2026

NFIB Research Center Publishes New Survey on Health Insurance

New Research About Small Businesses Offering – and Not Offering – Health Insurance

Ever-rising health insurance costs are a significant burden for America’s job creators and communities nationwide. For four decades, the cost of health insurance has remained the number one concern for small businesses. The problem is only getting worse, according to a new Small Business Health Insurance Survey by the NFIB Research Center. Ninety-eight percent of small businesses offering health insurance are concerned that healthcare costs will become unsustainable for them within the next 5-10 years. The challenges are significant when small business owners try to offer health insurance for themselves and their employees. The new survey explains many of these challenges and provides a closer look into the relationship between small business owners and health insurance. “Health insurance has been a continuous challenge for small business owners,” said Holly Wade, Executive Director of NFIB’s Research Center. “The cost of health insurance is by far the biggest challenge for employers who offer health insurance and for those who do not offer it. Small employers compete for talent in filling open positions and are aware that health insurance is an important benefit for many employees and job seekers.” According to the survey, over half (56%) of small employers currently offer health insurance to employees. Larger firms were far more likely to offer health insurance, with 89% of firms with 30 or more employees currently offering health insurance, compared to 39% of those with 1-9 employees. NFIB member Kelly Moore, who owns and operates three National Automotive Parts Association (NAPA) retail locations in Ohio, testified before the U.S. House Ways & Means Subcommittee on Health about the difficulties her business faces in offering health insurance to their employees. “In a competitive job market, quality health insurance benefits can make all the difference when recruiting the best candidates,” Kelly explained to the committee members. “To make matters worse, small business owners do not have the scale. They have steep regulatory burdens and stricter mandates than larger corporations, making it difficult to compete, especially when it comes to offering more affordable health insurance packages.”

The most commonly-cited reason small employers do not offer health insurance is that it is too expensive (65%). Independent businesses with 30 or more employees overwhelmingly (88%) reported this as the most important reason they do not offer health insurance, compared to firms with 1-9 employees (63%) and 10-29 employees (70%). Other reasons for not offering health insurance included having access to low-cost coverage in the government exchange marketplace or other government program, not having enough employees interested in participating, and administrative difficulties. Nearly half of small employers who do not offer health insurance do not anticipate that they will offer it in the future. Health insurance is an important benefit for many employees and job seekers, and small employers compete for talent by offering competitive compensation packages. Sixty-three percent of all employers believe that offering health insurance to recruit and retain employees is very or moderately important. Almost all (94%) of small employers find it challenging to some degree to manage the cost of offering employer-sponsored health insurance, with almost half (48%) reporting it as very challenging. Small business owners are having to make tough decisions to contend with the skyrocketing costs. Many small employers have taken lower profits or raised prices to manage the increased costs of offering health insurance. Others have increased productivity and efficiencies, increased employee cost-share, delayed or reduced business investment, or offered financial incentives to purchase health insurance in the individual market. However, almost all (98%) small employers offering health insurance are concerned that the cost of providing health insurance to their employees will become unsustainable in the next 5-10 years. When asked if small employers have considered offering a tax-preferred reimbursement or financial incentive to purchase health insurance on their own, over half (68%) reported they have not considered it. You can read the full health insurance survey here. Take Action: Click here to answer a few questions on your small business’ experiences with healthcare costs.

Topics:

Research

Get to know NFIB

NFIB is a member-driven organization advocating on behalf of small and independent businesses nationwide.

Learn More

May 8, 2026

OSHA Heat Safety Rules for Small Businesses and Steps to Protect Your Workers

Whether your employees work inside or out, heat-related illness is a serious risk that can lead to legal and financial consequences for your business. As the O…