Employers Uncertain About Affording Employer-Sponsored Health Plans Within the Next 3 Years

Offering health benefits could soon be a top priority to small- and midsize businesses throughout the country, as a new report shows that these businesses are worried about being able to afford to offer these services as soon as 3 years from now.^1,2 This worry could cause a shift away from employer-sponsored group health plans.

A new survey found that employers were not certain they would be able to afford health insurance for their employees within 3 years. | Image credit: Maksym Yemelyanov - stock.adobe.com

The report was compiled based on a survey created by eHealth and issued by a third-party vendor on July 15-16, 2025, that included 500 owners and managers of businesses across the US. The survey aimed to assess the feelings of business owners surrounding health benefits, whether they believed a new system was needed, and what that system would be. Individual Coverage Healthcare Reimbursement Arrangements (ICHRAs) were considered as a potential alternative to the current employer-sponsored model for health insurance.

Worry that they would not be able to afford sponsoring group health plans was prevalent in nearly the entire group, with 89% of owners afraid they would not be able to afford the plan within the next 3 years. Of those offering health benefits, 48% reported being “very worried” about affording the plan in 3 years; 12% reported not being worried about the cost of their group health coverage.

A majority of employers believed that they should make monetary contributions toward an employee’s health plan that they purchase themselves rather than sponsoring a plan themselves. A total of 75% of the surveyed participants believed that this model was better for them, and 66% that did not currently offer employer-sponsored health insurance stated that they would contribute money toward their employees’ health plans if they had the option to do so. Forty-two percent of those who sponsored a group health insurance plan called it a “big burden” to supply, and another 42% categorized it as a burden.

The current model for health benefits was also unpopular, with 93% believing that they needed a new solution due to the current model no longer working.

Government intervention was requested by a majority of the business owners when it came to making sure that challenges were addressed. Overall, 92% of the respondents believed that officials were not currently paying enough attention to the issue. Even though Congress debated on the expansion of ICHRAs during the drafting stages of the One Big Beautiful Bill Act (OBBBA), 54% of the respondents said that they were uneducated on or unfamiliar with ICHRAs.

Should the tax incentives in the House version of OBBBA become available, 82% of the respondents said that they would adopt the ICHRA model.

Cost was the most common reason for respondents not offering group coverage, with 43% of those who did not offer group benefits stating that cost was the main reason for not providing it. A total of 39% believed that offering employer-sponsored insurance was not necessary for their employees, 18% said the administrative burden was too high to provide it, and 15% did not know how to start providing the coverage.

“This survey shows many small and midsize businesses are reaching a breaking point on health benefit costs, spurring a growing number to consider alternative coverage options for their employees," Whitney Stidom, vice president of employer enablement at eHealth, said in a statement to The American Journal of Managed Care^®. "As employers evaluate making the move from traditional group insurance to an [ICHRA], it is crucial to consider multiple factors. That includes the company's specific claims history, local health insurance dynamics, and how to seamlessly support employees before, during, and after they enroll in a health plan."

The results of this survey are particularly enlightening following the passage of the budget bill in July. The bill did not include tax incentives for ICHRAs but did cut funding for Medicaid,³ which could leave more people reliant on employer-sponsored plans should they lose the health plan provided by the government. With those on Medicaid losing their coverage within the next 4 years and employers facing challenges that could leave them unable to afford the plan within 3 years, this issue could come to a head around the same time, making it a priority to address moving forward.

References

1. Nine in 10 small to mid-sized business worry they won’t be able to afford health benefits in three years. News release. eHealth. August 20, 2025. Accessed August 20, 2025. https://news.ehealthinsurance.com/news/nine-in-10-small-to-mid-sized-businesses-worry-they-won-t-be-able-to-afford-health-benefits-in-three-years

2. The challenge of health benefits for smaller businesses: an eHealth survey. eHealth. August 20, 2025. Accessed August 20, 2025. https://news.ehealthinsurance.com/_ir/68/20256/eHealth_Small_Mid-Sized_Business_ICHRA_Survey_2025.pdf

3. Bonavitacola J. Experts highlight consequences of Medicaid rollbacks due to budget bill. AJMC. July 10, 2025. Accessed August 20, 2025. https://www.ajmc.com/view/experts-highlight-consequences-of-medicaid-rollbacks-due-to-budget-bill