A recent report by the National Federation of Independent Business about the lack of affordable health insurance reveals what many business owners already know –  providing health insurance for employees is getting increasingly more expensive.. This year Oregon small businesses buying insurance through the small group market will see a premium jump of 12% over last year.

Here is a chart showing the Oregon State Division of Financial Regulations approved provider rate increases for 2025.  These small group market rates are for companies with 50 or fewer employees.

This is not only an Oregon problem, but a national one.

Small businesses across the nation are facing similar rate hikes. The recent report by the National Federation of Independent Business (NFIB) revealed a “dire prognosis for the small-group insurance market” across the nation.

Key findings showed that: in the last two decades average premiums for small business have gone up 120%; small businesses pay twice as much for health insurance as large businesses; and 98% of small businesses say they are worried they won’t be able to afford to continue offering insurance.

According to the U.S. Bureau of Labor Statistics the 2024 average employer premium for family coverage medical care was $1232 per month for small market coverage.

On April 2nd in testimony before the Congressional Subcommittee on Health, Employment, Labor & Pensions, U.S. Representative Rick Allen from Georgia sounded the alarm, “Rising costs have a disproportionate impact on small businesses, as they are less able to absorb the impacts of rising health care costs. Ninety-four percent of small employers find it challenging to manage the cost of their health plans, and 98 percent believe that the cost of their health plans will become unsustainable within the next decade.”

Several factors are driving health care insurance costs higher including the high cost of prescription drugs, a shortage of healthcare workers, and a lack of price transparency around health care costs that make it hard for consumers to manage their care.

To help bring down costs, the NFIB recommends that Congress take legislative action to support small businesses with targeted health insurance tax credits, promote price transparency and price certainty, and eliminate one-size-fits-all mandates that drive up premiums.

We are closely following Oregon’s 2025 legislative session to monitor bills that could affect health care costs for Oregon’s small business owners.