The implementation of the Affordable Care Act (ACA), also commonly known as Obamacare, which was passed in 2010, has further altered the insurance landscape.
The ACA’s coverage through individual marketplaces, which also include government subsidies, hasn’t helped lower the cost for small businesses.
A new study shows that Florida companies with fewer than 50 employees that offer health insurance have become significantly more expensive over the past decade, forcing many to reevaluate or eliminate this once-common benefit.
Take Command, a management solutions firm that helps companies reimburse employees for health insurance dealing with Health Reimbursement Arrangements (HRAs) found in 2009, 34.5% of small businesses in Florida offered their employees’ health insurance. By 2023, this figure had fallen to 21%, a decrease of 13.6 percentage points —the 13th steepest decline in the country.
Nationwide, coverage rates have dropped as costs have climbed. In 2000, 47% of small businesses in the U.S. offered health insurance. Today, just 30.1% of small businesses nationwide provide health coverage to their workers. “While coverage has declined, there’s been a 182% surge in premium costs over the same period,” said Take Command.
A new analysis from Take Command breaks down what’s driving the decline in small businesses offering health coverage, identifies which industries and states have been affected the most, and how some companies are adapting with alternative solutions, such as Health Reimbursement Arrangements (HRAs).
Since 2009, every primary sector has seen declines in small business health coverage. Some of the steepest declines occurred in industries that historically had higher rates of coverage. In wholesale trade, the share of small businesses offering health insurance fell by 17.6 percentage points—from 54.2% in 2009 to just 36.6% in 2023. Mining and manufacturing firms dropped from 56.9% to 43.6%, while professional services fell from 48.2% to 35.0%. Sectors such as construction, transportation, and financial services all saw double-digit declines as well.
“While employer-sponsored insurance remains a key component of the U.S. healthcare system, small businesses—facing limited bargaining power and narrower profit margins—have struggled to keep up with premium growth,” said the report.
