As rising healthcare costs and the expiration of ACA Marketplace subsidies squeeze small businesses, many are dropping traditional health insurance and turning to telehealth as a lower-cost alternative.
-- An estimated 4.8 million could go uninsured this year following the expiration of ACA Marketplace subsidies on Dec 31, causing some 2026 plan premiums to rise sharply, in many cases several-fold, with small businesses getting hit the hardest.
48% of adults with ACA Marketplace coverage are small business owners, small business employees, or self-employed, according to KFF, a nonpartisan health policy research group, with small business owners three times more likely to rely on the Marketplace for coverage than other enrollees.
Small Business Owners Face Sudden Coverage Loss
Chiropractor Eric Frankenfeld and wife/office manager Lisa decided to forgo coverage in 2026 after learning that their ACA Marketplace plan’s premium would skyrocket from $340/mo to $1,928/mo.
“We are health care providers who cannot afford benefits. Oh, the irony. Purchasing a plan doesn’t make financial sense. We’re just going to cross our fingers and hope for the best.”
Rick Cole with Martinsburg Service in Martinsburg, WV said, “High health care costs for small businesses like mine have cost us employees, made it hard to find employees, reduced our net profit considerably, and put strains on our work families!”
Kathy and Jeffrey Many, who run a garage door business in Brandon, Vermont, have decided to go uninsured when they found out their plan would be shooting up to nearly $2,670 a month, after paying only $625 last year. Being uninsured will be “very nerve-wracking,” Kathy said.
Less Than Half of Employers Offer Health Benefits
According to a new national research report from the Employee Benefit Research Institute (EBRI), only 49% of employers currently offer health benefits to their employees, with small businesses dropping coverage the fastest.
With a projected 9% cost surge in 2026, industry forecasts show the average total employer health care cost per employee will surpass $17,000, the biggest jump in 15 years, adding new pressure on small businesses already struggling to maintain benefits.
“If health insurance premiums rise faster than wages and general inflation, small employers are likely to face intensified financial strain, which could accelerate the erosion of health plan sponsorship among firms with fewer than 100 workers,” said Paul Fronstin, Ph.D., director of Health Benefits Research, EBRI.
Telehealth Emerges as Lower-Cost Alternative
As ACA subsidies expire and premiums rise, many small businesses are exploring telehealth packages as a cost-conscious option for their uninsured employees. While not traditional health insurance, they cover basic medical needs and support their employees’ mental health, strengthening workforce stability.
With care accessible from anywhere 24/7, 365 days a year, offering these telehealth plans means fewer missed work days, boosted productivity, and a healthier staff.
Subscription-based models are currently trending, providing unlimited access to doctors and mental health therapists for a flat monthly cost, with no usage or visit fees.
Wendy Jordan of Jordan Capital Consulting, which brokers one such plan says, “When traditional insurance isn’t financially viable, $40 a month per employee is feasible for small businesses that want to provide a baseline level of care for their team and their families.”
She continues, “We’re also onboarding an increasing number of business associations and trade associations, as well as local chambers of commerce. They see the importance of making this available to their member base and the value in adding it to their membership benefits as the need for alternative health insurance options soars.”
More information about this type of plan can be found at https://www.40famplan.com.
For nearly half of the country’s small businesses, providing traditional insurance at an average of $17,000 per employee is out of reach, but doing nothing is costly. Lower-cost virtual care models are helping employers offer a fundamental level of support, improving retention and long-term business sustainability.
Contact Info:
Name: Wendy Jordan
Email: Send Email
Organization: Jordan Capital Consulting
Address: 106 Langtree Village Drive Ste 301, Mooresville, North Carolina 28117, United States
Phone: +1-866-609-8671
Website: https://jordanconsulting.org/
Source: PressCable
Release ID: 89182808
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