Nine in 10 Small to Mid-Sized Businesses Worry They Won't Be Able to Afford Health Benefits in Three Years

Rhea-AI Summary

eHealth (NASDAQ:EHTH) released a survey revealing significant concerns among small to mid-sized businesses about health benefits sustainability. The study of 500+ business owners shows that 89% worry about affording group health plans within three years, while 75% favor a defined contribution approach similar to Individual Coverage Health Reimbursement Arrangements (ICHRA).

Key findings highlight that 93% believe the current health benefit model needs replacement, and ICHRA enrollment has increased 52% this year. Despite Congressional discussions about tax incentives, 54% remain unfamiliar with ICHRA. The survey also revealed that 82% would be more likely to adopt ICHRA if proposed tax incentives become available.

Positive

• None.

Negative

• 89% of businesses worry about affording group health plans within three years
• 54% remain unfamiliar with ICHRA despite Congressional discussions
• 92% believe government leaders aren't addressing business owners' health benefit challenges
• 93% say current health benefit model isn't working anymore

Amid concerns about rising costs and administrative burdens, 75% favor a move to a "defined contribution" approach to health benefits

Awareness of this approach remains unchanged from last year, despite recent discussion by Congress to offer tax incentives as part of the Big Beautiful Bill

AUSTIN, Texas, Aug. 20, 2025 /PRNewswire/ -- eHealth, Inc. (Nasdaq: EHTH), a leading health insurance marketplace, 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%.

About eHealth (NASDAQ: EHTH)
We're Matchmakers. For over 25 years, eHealth has helped millions of Americans find the healthcare coverage that fits their needs at a price they can afford. Consumers can visit our health insurance marketplace at eHealth.com, or call us to speak with a licensed insurance agent at 1-800-EHEALTH (1-800-343-2584), TTY 711. As a leading independent licensed insurance agency and advisor, eHealth offers access to over 180 health insurers, including national and regional companies.

For more information, visit ehealth.com or follow us on LinkedIn, Facebook, Instagram, and X. Open positions can be found on our career page.

eHealth media inquiries: pr@ehealth.com

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SOURCE eHealth, Inc.

FAQ

What percentage of small businesses are concerned about affording health benefits by 2028?

According to eHealth's survey, 89% of small to mid-sized businesses currently sponsoring group health plans worry they won't be able to afford it within three years.

How much has ICHRA enrollment increased among small businesses in 2025?

eHealth reports that ICHRA enrollment among small businesses has increased by 52% in 2025.

What percentage of businesses support a defined contribution approach to health benefits?

75% of respondents favor a defined contribution approach where employers contribute to employee-purchased health insurance rather than sponsoring traditional group health plans.

How many businesses would adopt ICHRA if tax incentives were available?

82% of surveyed businesses indicated they would be more likely to adopt ICHRA if tax incentives proposed in the House version of the Big Beautiful Bill became available.

What percentage of businesses are familiar with ICHRA in 2025?

According to the survey, 54% of respondents remain unfamiliar with or uneducated about ICHRA, even after Congressional discussions about its expansion.