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Small businesses face double-digit health premium hikes with little cost clarity

A survey of 503 U.S. small and mid-sized company leaders found 39% saw double-digit renewal increases, and 48% often paid the first insurer quote.

Reported · Written up by our desk · Health Insurance

Small and mid-sized businesses in the U.S. are absorbing steep health insurance renewal increases, often without clear explanations for what is driving the higher premiums, according to a survey by Ignition Benefits. Ignition Benefits said it polled 503 leaders at companies with 10 to 250 employees. Among 357 leaders who could name their renewal figure, 39% reported a double-digit increase, with 9% seeing hikes of 20% or more, for an overall average increase of 7%.

The report found many companies respond by making internal tradeoffs: 64% said they had to adjust business spending, most often by shrinking budgets for raises and bonuses, cited by 26% of respondents. Nearly half of small businesses, 48%, said their default response to rising costs is shifting more burden to employees through higher premium shares, higher deductibles, or coverage cuts.

Ignition Benefits also reported limited transparency and few meaningful opportunities to shop pricing. Only 31% of companies received a clear breakdown of what drove their cost increase, and 49% of leaders believed they had been overcharged, though just 17% felt confident saying so and 11% said they could not tell either way. Geography mattered as well, with Northeast companies estimating $9,014 per covered employee annually versus $6,362 in the West, against a national average of $7,553.

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