Small business health insurance coverage at risk as costs rise, EBRI finds

Dive Brief:

Employment-based health insurance coverage remains the most common source of coverage among the nonelderly population, at roughly 60%, according to a recent research report from the Employee Benefit Research Institute.
Meanwhile, the share of employers providing coverage inched upward to 49% in 2024, from a near record low of 46.3% the year before, EBRI found.  
Gains in coverage offerings were limited to large employers, the research found. Those with more than 100 employees showed steady increases, while coverage among smaller employers deceased.

Dive Insight:

“The overall percentage of employers offering coverage is heavily influenced by the fact that small employers are in large part responsible for the decline in coverage, and most employers in the U.S. are small,” EBRI found. 

Paul Fronstin, director of health benefits research at EBRI, warned that the pressures facing small businesses could further exacerbate the problem.

“If health insurance premiums rise faster than wages and general inflation, small employers are likely to face intensified financial strain, which could accelerate the erosion of health plan sponsorship among firms with fewer than 100 workers,” Fronstin said in a statement.

Large employers, meanwhile, might shift costs to workers through higher deductibles, coinsurance or restricted networks, Fronstin said.

“That could preserve offer rates but reduce the value of coverage, potentially lowering take-up. For workers, the impact could be significant, meaning higher out-of-pocket costs, greater reliance on public programs and increased financial insecurity tied to health care expenses,” per Fronstin. 

The average cost of employer-sponsored health insurance rose to $17,496 in 2025, up 6% from a year earlier and greater than rates of inflation and wage growth, according to a November report by Mercer. Meanwhile, costs are expected to climb another 6.7% in 2026.