Survey Shows Rising Health Insurance Costs Prompt Small- to Mid-Sized Businesses to Consider Dropping Coverage
A new survey by eHealth reveals that over half of small- to mid-sized businesses offering group health insurance are facing premium increases of 10% or more for 2027, with some reporting hikes as high as 15%. Many employers expressed surprise at the size of these rate increases and cited cost concerns as a primary reason for considering dropping traditional coverage. The survey also highlights growing interest in alternative arrangements like Custom Health Option and Individual Care Expense (CHOICE) Arrangements. The report, based on responses from over 500 small- to mid-sized business owners and managers, shows that dissatisfaction with current health insurance plans is widespread due to high premiums, unpredictable costs, and administrative burdens. Nearly three-quarters of those surveyed are considering phasing out traditional group coverage in favor of more flexible options such as level-funded or self-funded plans. eHealth's CEO noted the increasing difficulty for employers to maintain affordable benefits amid rising healthcare costs, with many exploring alternatives that offer greater cost certainty and flexibility.
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Topics: CHOICE Arrangements employer benefits health insurance premium increases