Health premiums rising for Main Street businesses with little relief

Americans will experience sticker shock this health insurance open enrollment season with higher premiums for individuals and families and for small business owners and their main street workers across the United States; There’s not much relief in that. While small business advocates are asking Congress for help, prospects for support are uncertain at best.

After payroll, the biggest expense of small businesses is healthcare, and increases in healthcare costs especially negatively affect small companies. For example, small firms’ family premiums have increased steadily over the past two decades. There was an increase of more than 350% compared to 1999, according to data from KFF, formerly known as the Kaiser Family Foundation.

Of course, premiums are also increasing for large companies, but small companies generally feel this distress more acutely. For companies with 10 to 199 employees average family premium increased It rose from $16,977 in 2020 to $26,054 in 2025, according to a recent KFF report.

Healthcare consistently ranks in the top three as the “most important” issue for small business owners. CNBC|SurveyMonkey Small Business Survey. Immigration and healthcare are effectively tied for Nos. 2 and 3, topped only by “jobs and the economy.”

“Any increase is challenging for small businesses because most small firms already operate at low margins,” John Arensmeyer, founder and chief executive of Small Business Majority, a business advocacy organization, wrote in an email.

Government shutdown and ACA tax credits

A month-long government shutdown doesn’t inspire much confidence in lawmakers’ ability to push through major healthcare reform. Still, certain aspects of healthcare reform are being debated, including whether to expand enhanced premium tax credits designed to make healthcare more affordable through the Affordable Care Act (ACA). Market place. These loans will expire this year.

These credits were introduced in 2021 and were later extended until the end of 2025 by the Inflation Reduction Act. Enhanced tax credits increased the level of financial assistance available to eligible ACA marketplace enrollees. Middle-income enrollees with incomes above 400% of federal poverty guidelines also qualified for premium tax credits.

According to KFF, “Since the implementation of enhanced premium tax credits, enrollment in the ACA marketplace has more than doubled from approximately 11 million to more than 24 million, the vast majority of whom receive enhanced premium tax credits.”

If these credits expire, many marketplace enrollees will continue to qualify for a smaller tax credit while others will lose eligibility. According to KFF, these registrants will be subjected to a “double whammy”. They would lose all of their tax credits and be responsible for increased premiums.

According to Arensmeyer, half of all market enrollees are small business owners, self-employed entrepreneurs or small business employees. “In the individual market, data suggest that those who purchase health care through the Affordable Care Act marketplace would see an average increase of 75% if enhanced premium tax credits are not renewed,” he wrote.

A handful of deals to expand premium tax credits have already been rejected, and with the ongoing government shutdown it’s hard to say how things will improve. Generally speaking, Democrats want the temporary cuts renewed and are worried about sticker shock when the credits expire; Republicans are generally worried about cost; They believe they are helping people who are too high on the income scale and claim the market is full of “scams”.

One notable exception is Rep. Marjorie Taylor Green (R-Ga.), who has expressed disappointment in this omission. Republican alternative On the Affordable Care Act and tax subsidy issue.

Meanwhile, small businesses are also caught in sidewinds. A survey of 620 small business owners by Small Business for America’s Future, an advocacy group, found that 84 percent of respondents were concerned they would be unable to access healthcare in 2026 if tax credits expire at the end of the year. According to the survey, nearly 40 percent of respondents said premium increases would create serious financial hardship and threaten their operations. Nearly a quarter said they would have to eliminate employee insurance.

Small businesses lobby Congress

Small businesses are urging Congress to support healthcare reform in other ways. In October, NFIB, a nonprofit organization that advocates for small businesses, Sent a letter to Congress We support the CHOICE Regulation Act. According to NFIB, the bill provides small businesses with more affordable and flexible health insurance options by recording health reimbursement accounts in the tax code. It also gives small businesses an exemption from allowing pre-tax funds to pay for employee health care.

“The average cost of health care premiums for small business owners has increased more than 120% since 2000,” wrote Tyler Dever, NFIB director of federal government relations. “This significant increase has forced small businesses to make difficult choices, including limiting or eliminating health benefits for their employees. This is not an outcome small business owners desire because it can put entrepreneurs at a disadvantage when competing with larger companies to fill jobs.”

The bill was referred to the House Ways and Means Committee in September. A version of the bill has also been referred to the Senate Finance Committee.

Separately, President Trump recently suggested that Democrats and Republicans should join forces to find an alternative to the Affordable Care Act signed into law during President Obama’s administration. “We have to fix health care, because Obamacare is a disaster,” Trump told reporters aboard Air Force One en route to South Korea. A report from The Hill.

Even so, NSBA, an organization that advocates for small businesses, doesn’t see much enthusiasm in Congress for significant healthcare reform. “He is not at the top of MPs’ list,” a spokesman said.

Cuts to worker health benefits at small businesses

Due to rising healthcare costs, some small businesses have had to step back. Small Business Majority’s research found that small businesses are making some changes that include increasing employee contributions to health plans, switching to an insurance plan that offers more limited coverage, and cutting other employee benefits.

“As a result, as small businesses reduce their benefits offerings, it becomes increasingly difficult for them to compete with large companies for top talent,” Arensmeyer wrote. “The bottom line is that access to quality, affordable health insurance is not just a cost issue for small businesses, it’s also a workforce issue.”

There’s not much small businesses can do to keep costs down other than research or reconsider some of the benefits offered to workers. Still, Matthew Rae, associate director of KFF’s Healthcare Marketplace Program, encourages small businesses to look for potential savings opportunities. “Ask questions of your vendors and insurers to make sure you’re getting a plan that fits your population,” he said. “You can get creative with some offers to better manage the cost of the plans.”

GLP-1 weight loss drug pharmacy costs

Pharmacy prices a major driver of rising costsAccording to HUB International’s 2026 Benefit Cost Trend report, high-cost prescription drugs such as GLP-1s are a significant contributor.

According to KFF, more than 57 million privately insured adults may qualify for GLP-1 drugs such as Ozempic, Wegovy, Zepbound and Mounjaro, and employer coverage of GLP-1 drugs is expanding. According to the International Foundation of Employee Benefit Plans, 55% of employers cover GLP-1s for diabetes, and 36% cover them for both diabetes and weight loss.

While coverage of GLP-1 prescriptions is much more common among large employers than among small businesses, KFF’s recent research on the employer market (it did not examine firms with fewer than 200 employees) shows that many consider GLP-1 prescriptions. Deductions in this scope Considering the costs despite the health benefits being widely acknowledged.