According to the Center for Health Information and Analysis, from 2022-2023, health spending in Massachusetts increased to 8.6%, more than double the 3.6% cost growth benchmark set by policymakers. NFIB provided testimony for the years’ annual cost growth benchmark hearing noting that premiums continue to rise for small employers in an unsustainable way.

Before the hearing we asked NFIB members to report whether their 2025 premiums increased, decreased, or stayed the same. All of the respondents to our inquiry reported an increase of, on average, eleven percent. In our comments to policymakers, we conveyed a message that annual double-digit premium increases are not sustainable for small businesses. We shared that fewer employers can afford offering their workers coverage as the price of health insurance continues to skyrocket. This, with other cost drivers like energy, UI taxes, high labor costs, make Massachusetts an increasingly expense state to run a business.

Additionally, NFIB released a policy paper entitled, “Addressing the Health Insurance Affordability Crisis for Small Businesses.” Similar to data showing a decline in the number of lives covered by small-group insurance plans in the Massachusetts merged market, these nationwide 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.

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.

NFIB will continue to make health insurance affordability a top issue for policymakers this session because, on the current trajectory, more employers will drop coverage or be stuck in a high deductible, high out-of-pocket cost plan that does very little to provide a quality benefit for your workforce.