The National Federation of Independent Business (NFIB), a prominent advocacy group for small businesses in Vermont, has released a health care policy paper titled “Addressing the Health Insurance Affordability Crisis for Small Businesses.” The report highlights significant challenges faced by small businesses in providing health insurance to employees.
John Reynolds, NFIB Vermont State Director, stated, “The cost of providing health coverage to employees has been the number one concern for small business owners for nearly forty years.” He emphasized the importance of offering health insurance to attract and retain workers but noted that rising costs are making it increasingly difficult for small employers. Reynolds urged Vermont lawmakers to avoid adding mandates and regulations that increase coverage costs.
Key findings from the report include a sharp decline in the small-group market enrollment from 15 million individuals in 2014 to 8.5 million in 2023, representing a 44% decrease. Additionally, average premiums have risen significantly over two decades: single plan premiums increased by 120%, while family plan premiums went up by 129% for firms with fewer than 50 employees. Only 30% of small businesses now offer health insurance compared to nearly half in 2000.
The report also revealed that nearly all small businesses are concerned about affording health insurance over the next five years. Small businesses pay twice as much for health insurance as large ones, with those earning less than $600,000 spending almost 12% of payroll on benefits compared to 7% for firms with over $2.4 million revenue.
In Vermont specifically, state-regulated market prices have surged. The Kaiser Family Foundation reported a 153% increase in individual market “benchmark plan” premiums from 2018 to 2025. In the small group market, silver plan employee premiums rose approximately 37% from 2018 to 2024.
Reynolds further commented on rising healthcare costs linked to broader affordability issues such as workforce shortages and high taxes in Vermont: “Despite Vermont generally ranking among the healthiest states…small businesses struggle to afford employee coverage.”
NFIB’s priorities include promoting affordable coverage without additional mandates, leveling the playing field between big and small businesses by making self-insured plans more accessible, and increasing options through initiatives like Individual Coverage Health Reimbursement Arrangements (ICHRA) and Association Health Plans (AHP).
###
