Credit: Lightspring/Shutterstock
Many U.S. small employers simply give up on offering health insurance.
About 27% of the small employers that were paying health insurance premiums in 2022 stopped paying the premiums in 2023, according to a new report from a research arm of JPMorgan Chase.
Recommended For You
A 10% increase in the premiums pushed the drop rate up by 1.3 percentage points.
The study "emphasizes the need for policies and health care products that keep premiums affordable," the JPMorgan Chase analysts write.
Related: Benefits broker tells Congress about small employers' health coverage cost pain
Small employers that have trouble keeping their health benefits in place may have trouble attracting and keeping skilled employees, the analysts warn.
The study: JPMorgan Chase is one of the biggest banks in the world. Its views on small employers' health benefits could affect how Congress and federal agencies change benefits rules and programs.
Chris Wheat and other analysts at the JP Morgan Chase research arm based their analysis on JPMorgan Chase business deposit bank account user data.
The analysts defined a small employer as an employer with fewer than 50 employees.
The coverage drop rates reflect only businesses that managed to stay in business in both 2022 and 2023.
About 3% of the small employers that were paying for health insurance in 2022 closed.
The analysts noted that some of the small employers that stopped paying for health insurance might have continued to offer health benefits, possibly by setting up a cash-for-coverage plan or having a professional employer organization provide the coverage.
Results by sector: The analysts found that some types of employers were more likely to drop coverage than others and were more severely affected by increases in premiums than others.
The odds that an employer with fewer than 50 workers would give up its health coverage in 2023 ranged from 25%, for real estate agencies, up to 33%, for personal services firms.
The impact of a 10% premium increase ranged from none, for machinery shops and repair shops, up to 5.5 percentage points, for restaurants.
The numbers mean that even when health insurance rate increases were modest, a restaurant had a 30% chance of cutting out its health benefits between 2022 and 2023.
If premiums rose 10%, that increased the odds a restaurant would drop its coverage to about 35.5%.
© 2025 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
Allison Bell
Allison Bell, a senior reporter at ThinkAdvisor and BenefitsPRO, previously was an associate editor at National Underwriter Life & Health. She has a bachelor's degree in economics from Washington University in St. Louis and a master's degree in journalism from the Medill School of Journalism at Northwestern University. She can be reached through X at @Think_Allison.
