Small, midsized businesses fear they can’t afford health insurance

AUSTIN, Texas, Aug. 20, 2025 -- eHealth, Inc. today released new research showing most small- to mid-sized employers are worried about being able to afford offering health benefits in the future, while awareness of a defined contribution approach remains unchanged from a year ago.

Most respondents say the current model of health benefits is no longer working, with 75% expressing interest in an approach that mirrors what is available through Individual Coverage Health Reimbursement Arrangements (ICHRA). This model allows employers to contribute to employee health insurance premiums without serving as sponsor, enabling employees to buy a plan through a private or government exchange.

"Just as retirement savings shifted from pensions to 401(k)s decades ago, a similar transition is underway for health benefits," said Fran Soistman, CEO, eHealth. "Among small businesses, enrollment in ICHRA plans is up 52% this year, and more employers are looking at how this approach can help their workforce obtain health insurance while better controlling costs and reducing administrative burdens."

Findings from the survey of 500+ owners and managers of small to mid-sized include:

The status quo isn't working for many small to mid-sized businesses.

• 89% of those currently sponsoring group health plans worry they won't be able to afford it within three years.
• 93% say it's time for a new health benefit solution, because the current model isn't working anymore.

Most think an ICHRA-style model makes more sense in theory, although awareness of this approach remains low.

• 75% of respondents say employers should make defined contributions for employees to use toward purchasing their own coverage, rather than sponsoring a traditional employer-based group health plan.
• 66% of those not currently offering group health benefits say they would contribute toward the cost of employee-purchased health insurance premiums if there were a way to do so.
• 54% of respondents remain unfamiliar with or uneducated about ICHRA, even after Congress considered an expansion of ICHRA in an early version of the Big Beautiful Bill.

A call for government action and the need for ICHRA education.

• 92% of respondents say government leaders aren't paying enough attention to the health benefit challenges of business owners.
• 82% say they would be more likely to adopt ICHRA if tax incentives proposed in the House version of the Big Beautiful Bill became available.

Read the full report.

About the survey
eHealth's findings are based on a July 2025 survey of owners and managers of small to mid-sized businesses (with 500 employees or fewer). The survey was conducted through a national survey vendor. A total of 503 responses were collected, with a margin of error of plus or minus 4%.