Small businesses face uphill battle with health care benefits

Providing attractive health benefits at an affordable price is challenging for any employer in 2026 but especially for small and mid-sized businesses. These companies, which employ about half of the U.S. workforce, report average premium increases of 18%.

Morgan Health, a business unit of JPMorgan Chase Bank, recently surveyed health benefits decision makers about the ongoing need for solutions that make health care more accessible and transparent for small and mid-sized businesses. These are the key findings:

• Smaller businesses are disproportionately affected by health care costs. Nearly one-third of businesses with fewer than 50 employees report that health insurance costs are worsening their business situation, compared to 22% of larger small and mid-sized companies. Smaller firms are less likely to take action to offset rising costs, often because they are not required to offer coverage and may drop it altogether.
• Most small and mid-sized businesses prioritize preserving benefits, even at the expense of their business. Nearly three-quarters have taken steps in the past three years to respond to rising costs, such as implementing wellness programs, reducing spending elsewhere or shifting costs to employees. Cutting benefits often is considered a last resort.
• A large majority are interested in new or alternative coverage options but need stronger support and clarity. Eighty-five percent believe there may be valuable options they haven't explored, and 78% say more information could change their choices. However, more than three-quarters believe the disruption or uncertainty of alternative options outweighs potential savings.
• Many struggle with unclear health insurance information, driving interest in digital and AI tools. Nine in 10 would invest time to learn new tools if they made plan selection easier, and three-quarters believe AI-enabled tools could reduce reliance on outside experts. Still, only 12% currently rank AI or chat tools among their top decision resources.
• Brokers remain critical, but pricing and financial incentives complicate decisions. Although more than half of small and mid-sized companies are working with or considering using brokers, 20% have switched brokers and 53% have considered switching. A lack of transparency about broker compensation makes half of them less confident in their decisions.

Adoption of alternative coverage options must be driven by awareness, decision support and clearer cost and coverage expectations, reducing perceived risk and uncertainty of employee impact.