Health insurance premiums to rise for WA small businesses by about 12%

Health insurance costs in Washington for small businesses and their employees will increase an average of 11.9% in 2025, according to the state Office of the Insurance Commissioner.

This marks the highest increase for small employers in the last decade.

Nearly 220,000 people will be affected by the new rates starting in January. Ten insurers were approved to sell group plans to small employers, with the largest increase going to Regence BlueCross BlueShield of Oregon at 21.9%, impacting around 6,000 people.

"Health insurance costs have been the number one problem for small businesses for 38 years running, and these increases will only make it worse," said Patrick Connor, Washington state director for the National Federation of Independent Business.

Nationwide, a little over half of small employers offer employees health insurance.

"It's a tough decision for small businesses to make about whether or not to offer their employees health coverage. It's a promising sign that our state has over a dozen insurers offering small employers plans," said Washington Insurance Commissioner Mike Kreidler.

The nation's average annual premium for an individual employee is $1,368, up 6% from 2023, according to the health care research nonprofit KFF. That average rises to $6,296 for employees with family coverage, up 24% over the last five years.

"High costs are often passed along to customers, driving up the price of goods and services for the average American. We need action to address this issue and ensure small businesses can continue to be the engine that drives our economy forward," said Sammi Kerley, a small business advisor with Small Business for America's Future, in a press release from Fair Health Prices Washington, a consumer health care advocacy coalition.

Employers pay an average of $7,584 on top of their employees' share for health coverage for individuals, the KFF figures show.

Kreidler said his office sent a report to the Legislature in August with policy options to help make health care more affordable in Washington.

"We're hopeful we can improve the underlying factors that have pushed costs up," Kreidler said.