The National Federation of Independent Business (NFIB), Colorado’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 are a major concern for Colorado small business owners,” said NFIB Colorado State Director Michael Smith. “These costs, paired with inflation and hiring shortages, are forcing small business owners to make difficult decisions like cutting back or closing permanently. HB1297 will further add to the rising cost of doing business and make it more difficult to offer affordable health coverage to employees. NFIB urges the Legislature to vote against this bill and other legislation that will further hurt Main Street businesses.”

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.