More than 60 percent of Michigan small businesses say they might consider dropping health care for employees in the next seven years, according to the results of a survey released by the Small Business Association of Michigan (SBAM) in Lansing.
The survey, conducted this month, shows 42 percent of small businesses considering stopping health insurance in the next one to three years, 16 percent within four to six years, and 4 percent in seven years or more.
Eight out of 10 survey respondents also report double-digit increases in employee health care premiums, and more than 75 percent say the cost of health care limits their ability to hire new employees.
“Someone must pay the increased cost of health care, and in Michigan, it seems small businesses owners are bearing the brunt of it, with double-digit cost increases,” says Brian Calley, president and CEO of SBAM. “Some employers have seen an increase of as much as $2,000 per employee, per year.
“For a small business with 25 employees, that’s $50,000 more per year just in health care costs — $50,000 that could instead be used to hire another employee or invest in the business.”
Patti Eisenbraun, owner of Brown Iron Brewhouse in Royal Oak, says, “In a business like ours, we’re constantly watching every cost and finding ways to operate more efficiently, but there’s only so much you can do when health care premiums keep rising at this pace.
“These increases aren’t sustainable, and they’re forcing small business owners to make difficult decisions about staffing, pricing, and benefits. We need to see the same level of urgency and creativity within the health care system that small businesses bring to solving challenges every day.”
More than 85 percent of those surveyed also said employee benefit costs influence their long-term planning and growth strategies.
“Small business owners want to take care of their employees, and offering health coverage has always been part of that commitment,” says Mike Shabluk of Erie Custom Signs in Saginaw. “But when costs keep climbing year after year, it becomes harder to see a path forward. If nothing changes, more small businesses will be put in a position where they simply can’t offer coverage at all and that has real consequences for employees, families, and communities across Michigan.”
SBAM’s Board of Directors issued an open letter in April, seeking to call broader attention to the health care cost crisis, and asking those who oversee the health care system to work harder to minimize cost increases that are being passed onto small business owners.
SBAM received 269 member responses to its May 2026 health care costs survey. Eighty percent of respondents have 50 or fewer employees.
Source: DBusiness Magazine - https://www.dbusiness.com/daily-news/report-half-of-michigan-small-businesses-could-drop-health-care-benefits/
