Small employer coverage trends by state

What do Iowa, Mississippi, and Arkansas have in common?

They’re the only states with an increase in the percentage of small employers offering health benefits between 2002 and 2023!

A new analysis in Health Affairs (https://lnkd.in/gNJHFwXN) by Mark Meiselbach and Jean Abraham highlights a major trend in the U.S. health insurance landscape: small employers (<50 employees) are steadily dropping out of the market, declining from 47% offering insurance in 2002 to just 30% in 2023. Meanwhile, larger firms (50+ employees) have kept their offer rates above 95%.

Key insights from the analysis:

• Rising costs and premiums hit small firms hardest.

• State regulations (like strict benefit mandates or limits on self-funding) can increase premiums even more.

• ACA alternatives (like Medicaid expansion and Marketplace coverage) have made it easier for some workers to find other coverage.

As policymakers consider future reforms, they must ensure that new requirements don’t unintentionally price small businesses out of providing coverage.

Striking the right balance between essential protections and affordability is crucial if we want to keep (and potentially expand) health benefits for America’s small-business workforce.

If we want to foster an environment where small employers offer coverage, we need to reevaluate what the impact of coverage mandates will make on the decision to offer coverage at all.