Centennial State News

The National Federation of Independent Business (NFIB), an advocate for Colorado's small businesses, has introduced a new health care policy paper titled "Addressing the Health Insurance Affordability Crisis for Small Businesses." The report presents a critical outlook for the small-group insurance market, noting that employer-provided health coverage is becoming unsustainable for many small businesses and their employees.

Michael Smith, NFIB Colorado State Director, stated, "Health insurance costs are a major concern for Colorado small business owners." He emphasized that these costs, combined with inflation and hiring shortages, are forcing difficult decisions such as cutting back or closing permanently. Smith pointed out that proposed legislation, such as HB1297, could exacerbate these challenges by increasing business costs and making affordable health coverage harder to maintain.

The report highlights several significant findings:

- Enrollment in the small-group insurance market has dropped significantly, falling from 15 million in 2014 to 8.5 million in 2023, a 44% decrease.

- Small business premiums have sharply increased, with single plan premiums rising by 120% over the past two decades and family plan premiums by 129% for businesses with 50 or fewer employees.

- The proportion of small businesses offering health insurance has declined from nearly 50% in 2000 to 30%.

- A significant 98% of small businesses express concerns about affording health insurance in the coming years.

- Smaller businesses face higher costs, with firms earning less than $600,000 spending nearly 12% of payroll on health benefits, compared to 7% for firms earning more than $2.4 million.

The paper also outlines legislative measures aimed at alleviating these issues:

- Protecting employer-sponsored insurance

- Providing targeted health insurance tax credits for small businesses

- Expanding individual coverage health reimbursement arrangements (ICHRAs)

- Improving employer pooling arrangements

- Expanding access to health savings accounts (HSAs)

- Ensuring small businesses' access to stop-loss insurance

- Offering more affordable coverage options

- Eliminating costly one-size-fits-all mandates

- Promoting price transparency and certainty

- Discouraging hospital consolidation

- Reducing prescription drug prices through innovation

Interested parties can access the full report, "Addressing the Health Insurance Affordability Crisis for Small Businesses," for more detailed insights.