Hawkeye Reporter

The National Federation of Independent Business (NFIB), recognized as Iowa's leading small business advocacy group, has published a health care policy paper titled "Addressing the Health Insurance Affordability Crisis for Small Businesses." The report highlights significant challenges facing the small-group insurance market, noting that employer-provided health coverage is increasingly unsustainable for many small businesses and their employees.

NFIB Iowa State Director Matt Everson expressed concern over the current situation, stating, “The fact that only 30% of small businesses nationwide can still offer health insurance is deeply troubling for Iowa’s rural communities and small towns.” He urged lawmakers to take action by expanding access to Health Savings Accounts, improving employer pooling arrangements, and prioritizing policies that would make coverage more affordable.

The report outlines several key findings: enrollment in the small-group market has dropped significantly from 15 million individuals in 2014 to just 8.5 million in 2023, marking a 44% decline. Premiums have also seen substantial increases; average single plan premiums have risen by 120% over the past two decades, while family plan premiums have increased by 129% for companies with fewer than 50 employees. Additionally, only 30% of small businesses currently offer health insurance compared to nearly half in 2000. A staggering ninety-eight percent of these businesses express concerns about affording health insurance in the coming years. Furthermore, small businesses face higher costs than larger firms, with those earning less than $600,000 annually spending almost 12% of payroll on health benefits versus just 7% for firms making over $2.4 million.

Legislative recommendations from NFIB include addressing problematic PBM legislation such as HSB99/SF383 which could lead to increased healthcare costs without effectively reducing drug prices. Other suggestions involve protecting employer-sponsored insurance, supporting targeted tax credits for small businesses' health insurance needs, expanding Individual Coverage Health Reimbursement Arrangements (ICHRAs), improving pooling arrangements among employers, increasing access to Health Savings Accounts (HSAs), safeguarding access to stop-loss insurance for small businesses, broadening affordable coverage options, eliminating mandates that inflate premium costs and restrict competition, promoting price transparency and certainty in healthcare services pricing, discouraging hospital consolidation practices that limit choice and raise costs unnecessarily and reducing prescription drug prices through innovative measures.

For further details on this topic or to view the full report titled “Addressing the Health Insurance Affordability Crisis for Small Businesses,” interested parties are encouraged to refer directly to NFIB's publication.