Around one-quarter of small businesses that purchased health insurance in 2022 discontinued coverage in 2023, according to a report from JPMorganChase.
The bank published a report on the consistency of health insurance coverage among small businesses April 10.
Among small businesses with no employees, 26% stopped paying health insurance premiums between 2022 and 2023. Among businesses with employees, this share was 27%.
Here are five findings to note:
- The share of businesses dropping employees varied by industry. Among personal service businesses with employees, 33% discontinued insurance coverage between 2022 and 2023. Among real estate businesses, the share was 25%.
- A 10% hike in premiums cost was associated with a higher likelihood of discontinuing coverage, the analysts found.
- Most small businesses that stopped paying health insurance premiums continued to operate in the following years, according to the report. This indicates that discontinuing health insurance is often a “strategic move to manage expenses, rather than an indication of financial distress or impending closure.”
- In 2023, small businesses spent an average of 4.2% of total operating expenses on health insurance, a 3.1% jump from 2023.
- Policies to keep premiums affordable and predictable could help small businesses retain consistent coverage, according to JPMorganChase.
Read the full report here.
