Small business owners in Ohio are increasingly worried about the rising costs of healthcare, according to a recent report. The National Federation of Independent Business (NFIB) found that the small-group insurance market, a common way for small businesses to offer health coverage, is becoming less sustainable for both employers and employees.
“Ohio’s small business owners have reported health insurance costs as their number one concern for nearly four decades,” said Chris Ferruso, state director for NFIB Ohio. Ferruso added that while well-intentioned, legislators should avoid health insurance mandates, as these ultimately increase premiums and force small employers to re-evaluate whether they can afford to provide this benefit.
The NFIB’s “Address the Health Insurance Affordability Crisis for Small Businesses” report highlights the struggles of the small-group market. Enrollment in this market has fallen significantly, dropping 44% between 2014 and 2023, from 15 million people to 8.5 million. Furthermore, it detailed the increase in healthcare costs. The average single plan premium jumped 120% in the last 20 years. Family plans have also risen substantially, increasing 129% over the same period for businesses with 50 or fewer employees.
The report underscores the negative impact on small businesses. The number of small businesses offering health insurance has been cut nearly in half since 2000. The financial burden is especially heavy on smaller companies; businesses with less than $600,000 in revenue pay almost twice as much of payroll for insurance compared to companies with more than $2.4 million in revenues.
Ferruso sees potential solutions in the Ohio Legislature. He pointed to two specific bills in the Ohio Legislature that could provide some relief for small businesses. One would provide employers with 50 or fewer employees a tax credit of up to $400 per employee to help them provide a Individual Coverage Healthcare Reimbursement Arrangement. The second would offer employers a refundable tax credit for a portion of the premiums paid if they buy a group health plan for their employees.
Ferruso concluded by highlighting the disparity in regulations. “Larger businesses are typically exempt from state-imposed health insurance mandates under the federal ERISA law, leaving small businesses with skyrocketing costs. We encourage Ohio policymakers to make health care more affordable for all,” Ferruso stated.
