While the situation could change due to the coronavirus pandemic, which is taking a toll on small businesses, up through the end of 2018 the small business health insurance market was healthy through 2018, in spite of fears that the Affordable Care Act would be tough on small businesses.

Instead, according to a report from the Commonwealth Fund, rather than the ACA being too burdensome on small-business employers and end up wreaking havoc on the small-group health insurance market, it actually helped to stabilize premiums and made coverage both more accessible and more comprehensive—despite White House claims to the contrary.

Of course, the pandemic and new rules that allow unregulated health plans could overset everything, destabilizing the market—as the ACA did not do.

As of 2016, while the ACA had not reduced the cost of coverage for small-group insurance, additional data for 2017–2018 shows that small-group employers have not faced fewer coverage options. In fact, although enrollment "diminished steadily," that was due to employers choosing to self-insure rather than pay premiums and continued a trend that had begun before the ACA.

In addition, small business employees actually experienced a large increase in coverage because many were able to enroll in the ACA's subsidized individual market or in expanded Medicaid, with the trend being most notable among workers at midsized firms (20–49 workers). The uninsured rate actually dropped from 30 percent in 2012 to 13 percent in 2018.

Premiums have been relatively stable under the ACA, increasing on average about 5 percent annually—just slightly higher than the 4.5 percent average in the large-group market. In the 10 years prior to the ACA, double-digit increases were common in the small-group market.

The report adds, "Another indication of the small-group market stability is that several hundred insurers continue to compete in it because it remains profitable."

It remains to be seen what effect both the coronavirus pandemic and the new regulations from the Trump administration will do to the small-group market, it adds, with the former possibly leading to much steeper enrollment declines and premium increases and the latter allowing small groups to buy coverage outside the regulated market through association health plans. It concludes, "Vigilance will be required to assess whether these or other destabilizing threats cause real damage to the small-group market."

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How did the ACA affect the small-business health insurance market?

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