20 States Where the Most Small Businesses Have Cut Health Benefits

Editor's Note: This story originally appeared on Take Command.

Rising healthcare costs have put increasing pressure on small businesses across the United States. For firms with fewer than 50 employees, offering health insurance has become significantly more expensive over the past decade, forcing many to reevaluate or eliminate this once-common benefit.

While employer-sponsored insurance remains a key component of the U.S. healthcare system, small businesses — facing limited bargaining power and narrower profit margins — have struggled to keep up with premium growth.

More than a quarter of the U.S. workforce is employed by firms with fewer than 50 employees, yet only 30% of these businesses offer health coverage.

A new analysis by Take Command — a SaaS company that helps businesses provide Health Reimbursement Arrangements (HRAs) — uses data from the Medical Expenditure Panel Survey (MEPS) to examine how rising costs have reshaped the small group insurance landscape.

Following are the states where rising healthcare costs have caused the most small businesses to eliminate benefits.

20. Kentucky

• Change in small businesses offering coverage (pp): -10.9
• Change in small business employees at firms with coverage (pp): -13.8
• Change in small businesses offering coverage (establishments): -4,972
• Change in small business employees at firms with coverage (employees): -35,556
• Small businesses offering coverage (2023): 27.7%
• Small businesses offering coverage (2009): 38.6%
• Small business employees at firms with coverage (2023): 47.5%
• Small business employees at firms with coverage (2009): 61.3%
• Average annual single-coverage premium: $6,933

19. Michigan

• Change in small businesses offering coverage (pp): -11.1
• Change in small business employees at firms with coverage (pp): -15.2
• Change in small businesses offering coverage (establishments): -14,163
• Change in small business employees at firms with coverage (employees): -114,924
• Small businesses offering coverage (2023): 29.3%
• Small businesses offering coverage (2009): 40.4%
• Small business employees at firms with coverage (2023): 48.4%
• Small business employees at firms with coverage (2009): 63.6%
• Average annual single-coverage premium: $8,080

18. Idaho

• Change in small businesses offering coverage (pp): -11.3
• Change in small business employees at firms with coverage (pp): -6.9
• Change in small businesses offering coverage (establishments): -880
• Change in small business employees at firms with coverage (employees): 14,914
• Small businesses offering coverage (2023): 20.5%
• Small businesses offering coverage (2009): 31.8%
• Small business employees at firms with coverage (2023): 42.2%
• Small business employees at firms with coverage (2009): 49.1%
• Average annual single-coverage premium: $6,861

17. Alaska

• Change in small businesses offering coverage (pp): -12.2
• Change in small business employees at firms with coverage (pp): -17.1
• Change in small businesses offering coverage (establishments): -1,285
• Change in small business employees at firms with coverage (employees): -5,102
• Small businesses offering coverage (2023): 13.6%
• Small businesses offering coverage (2009): 25.8%
• Small business employees at firms with coverage (2023): 25.8%
• Small business employees at firms with coverage (2009): 42.9%
• Average annual single-coverage premium: $10,986

16. Arizona

• Change in small businesses offering coverage (pp): -12.6
• Change in small business employees at firms with coverage (pp): -1.1
• Change in small businesses offering coverage (establishments): -4,803
• Change in small business employees at firms with coverage (employees): 83,493
• Small businesses offering coverage (2023): 21.6%
• Small businesses offering coverage (2009): 34.2%
• Small business employees at firms with coverage (2023): 46.8%
• Small business employees at firms with coverage (2009): 47.9%
• Average annual single-coverage premium: $6,926

15. Maryland

• Change in small businesses offering coverage (pp): -13.3
• Change in small business employees at firms with coverage (pp): -10.0
• Change in small businesses offering coverage (establishments): -8,635
• Change in small business employees at firms with coverage (employees): -7,440
• Small businesses offering coverage (2023): 35.7%
• Small businesses offering coverage (2009): 49.0%
• Small business employees at firms with coverage (2023): 56.7%
• Small business employees at firms with coverage (2009): 66.7%
• Average annual single-coverage premium: $6,604

14. Georgia

• Change in small businesses offering coverage (pp): -13.5
• Change in small business employees at firms with coverage (pp): -3.5
• Change in small businesses offering coverage (establishments): -10,515
• Change in small business employees at firms with coverage (employees): 120,811
• Small businesses offering coverage (2023): 22.8%
• Small businesses offering coverage (2009): 36.3%
• Small business employees at firms with coverage (2023): 47.5%
• Small business employees at firms with coverage (2009): 51.0%
• Average annual single-coverage premium: $8,348

13. Florida

• Change in small businesses offering coverage (pp): -13.6
• Change in small business employees at firms with coverage (pp): -18.1
• Change in small businesses offering coverage (establishments): -7,606
• Change in small business employees at firms with coverage (employees): -52,547
• Small businesses offering coverage (2023): 20.9%
• Small businesses offering coverage (2009): 34.5%
• Small business employees at firms with coverage (2023): 35.1%
• Small business employees at firms with coverage (2009): 53.2%
• Average annual single-coverage premium: $7,605

12. New Hampshire

• Change in small businesses offering coverage (pp): -14.7
• Change in small business employees at firms with coverage (pp): -12.9
• Change in small businesses offering coverage (establishments): -3,435
• Change in small business employees at firms with coverage (employees): -11,561
• Small businesses offering coverage (2023): 33.7%
• Small businesses offering coverage (2009): 48.4%
• Small business employees at firms with coverage (2023): 56.8%
• Small business employees at firms with coverage (2009): 69.7%
• Average annual single-coverage premium: $7,954

11. Pennsylvania

• Change in small businesses offering coverage (pp): -14.7
• Change in small business employees at firms with coverage (pp): -13.4
• Change in small businesses offering coverage (establishments): -18,019
• Change in small business employees at firms with coverage (employees): -123,153
• Small businesses offering coverage (2023): 34.7%
• Small businesses offering coverage (2009): 49.4%
• Small business employees at firms with coverage (2023): 53.0%
• Small business employees at firms with coverage (2009): 66.4%
• Average annual single-coverage premium: $8,136

10. South Carolina

• Change in small businesses offering coverage (pp): -15.0
• Change in small business employees at firms with coverage (pp): -17.8
• Change in small businesses offering coverage (establishments): -6,614
• Change in small business employees at firms with coverage (employees): -33,298
• Small businesses offering coverage (2023): 20.5%
• Small businesses offering coverage (2009): 35.5%
• Small business employees at firms with coverage (2023): 39.0%
• Small business employees at firms with coverage (2009): 56.8%
• Average annual single-coverage premium: $7,450

9. Minnesota

• Change in small businesses offering coverage (pp): -15.5
• Change in small business employees at firms with coverage (pp): -7.6
• Change in small businesses offering coverage (establishments): -10,644
• Change in small business employees at firms with coverage (employees): 14,994
• Small businesses offering coverage (2023): 27.1%
• Small businesses offering coverage (2009): 42.6%
• Small business employees at firms with coverage (2023): 52.3%
• Small business employees at firms with coverage (2009): 59.9%
• Average annual single-coverage premium: $8,219

8. Delaware

• Change in small businesses offering coverage (pp): -17.1
• Change in small business employees at firms with coverage (pp): -12.0
• Change in small businesses offering coverage (establishments): -811
• Change in small business employees at firms with coverage (employees): 6,358
• Small businesses offering coverage (2023): 28.8%
• Small businesses offering coverage (2009): 45.9%
• Small business employees at firms with coverage (2023): 55.4%
• Small business employees at firms with coverage (2009): 67.4%
• Average annual single-coverage premium: $8,517

7. Rhode Island

• Change in small businesses offering coverage (pp): -18.1
• Change in small business employees at firms with coverage (pp): -12.9
• Change in small businesses offering coverage (establishments): -2,920
• Change in small business employees at firms with coverage (employees): -4,637
• Small businesses offering coverage (2023): 31.5%
• Small businesses offering coverage (2009): 49.6%
• Small business employees at firms with coverage (2023): 55.9%
• Small business employees at firms with coverage (2009): 68.8%
• Average annual single-coverage premium: $8,014

6. New York

• Change in small businesses offering coverage (pp): -18.1
• Change in small business employees at firms with coverage (pp): -15.3
• Change in small businesses offering coverage (establishments): -50,887
• Change in small business employees at firms with coverage (employees): -160,455
• Small businesses offering coverage (2023): 32.0%
• Small businesses offering coverage (2009): 50.1%
• Small business employees at firms with coverage (2023): 54.7%
• Small business employees at firms with coverage (2009): 70.0%
• Average annual single-coverage premium: $9,662

5. Ohio

• Change in small businesses offering coverage (pp): -19.2
• Change in small business employees at firms with coverage (pp): -19.5
• Change in small businesses offering coverage (establishments): -29,696
• Change in small business employees at firms with coverage (employees): -161,706
• Small businesses offering coverage (2023): 30.3%
• Small businesses offering coverage (2009): 49.5%
• Small business employees at firms with coverage (2023): 45.9%
• Small business employees at firms with coverage (2009): 65.4%
• Average annual single-coverage premium: $7,872

4. Colorado

• Change in small businesses offering coverage (pp): -20.1
• Change in small business employees at firms with coverage (pp): -11.5
• Change in small businesses offering coverage (establishments): -12,857
• Change in small business employees at firms with coverage (employees): 17,129
• Small businesses offering coverage (2023): 22.9%
• Small businesses offering coverage (2009): 43.0%
• Small business employees at firms with coverage (2023): 49.5%
• Small business employees at firms with coverage (2009): 61.0%
• Average annual single-coverage premium: $7,773

3. Vermont

• Change in small businesses offering coverage (pp): -21.5
• Change in small business employees at firms with coverage (pp): -24.5
• Change in small businesses offering coverage (establishments): -3,743
• Change in small business employees at firms with coverage (employees): -20,324
• Small businesses offering coverage (2023): 25.3%
• Small businesses offering coverage (2009): 46.8%
• Small business employees at firms with coverage (2023): 45.7%
• Small business employees at firms with coverage (2009): 70.2%
• Average annual single-coverage premium: $8,515

2. New Jersey

• Change in small businesses offering coverage (pp): -22.7
• Change in small business employees at firms with coverage (pp): -30.6
• Change in small businesses offering coverage (establishments): -24,510
• Change in small business employees at firms with coverage (employees): -235,274
• Small businesses offering coverage (2023): 33.4%
• Small businesses offering coverage (2009): 56.1%
• Small business employees at firms with coverage (2023): 43.3%
• Small business employees at firms with coverage (2009): 73.9%
• Average annual single-coverage premium: $9,127

1. Connecticut

• Change in small businesses offering coverage (pp): -24.6
• Change in small business employees at firms with coverage (pp): -20.5
• Change in small businesses offering coverage (establishments): -14,090
• Change in small business employees at firms with coverage (employees): -78,058
• Small businesses offering coverage (2023): 27.0%
• Small businesses offering coverage (2009): 51.6%
• Small business employees at firms with coverage (2023): 48.4%
• Small business employees at firms with coverage (2009): 68.9%
• Average annual single-coverage premium: $9,065

Methodology

This analysis draws on data from the Medical Expenditure Panel Survey (MEPS), a program administered by the Agency for Healthcare Research and Quality (AHRQ) under the U.S. Department of Health and Human Services.

The focus is on private-sector establishments with fewer than 50 employees, with the most recent data available through 2023. Unless otherwise noted, changes are calculated between 2009 — the year before the Affordable Care Act was passed — and 2023 — the most recent year of available data.

Employee-related figures reflect individuals working at establishments that offer health insurance, regardless of whether the employees are enrolled in the offered plans. Premium statistics are average annual single-coverage premiums.