Report: Small businesses strive to balance rising costs and health coverage
Small employers are battling rising costs, tariffs and recession issues. Still, many small businesses are developing strategies for how to deal with these headwinds, including in health insurance, according to a recent Chase report.
Chase 2025 middle-grade business leader Outlook Pulse released last week, surveying 563 small business owners in June. It found inflation to be a “headache for business owners” with 32% of respondents choosing it as the top three challenges in 2025. Despite inflation, 40% of businesses say they plan to continue growing, 35% keep growing, and 25% are slowing down. To combat inflation, many people want to reduce unnecessary spending.
Additionally, about a quarter of respondents viewed tariffs as a top three challenge to their business. About 54% said they expect tariffs to hurt profits. Nevertheless, 63% of people are “extremely or very” confident that they can mitigate the effects of tariffs. Strategies include switching suppliers and renegotiating contracts.
The survey also found that rising health care costs have an impact on hiring, with 33% of small businesses showing that higher health insurance costs are partly why they restrict hiring. Nevertheless, about one in 10 respondents said they already had health insurance. Among those who plan to increase coverage, 63% do this to provide a higher quality plan. About 36% of respondents said attracting new talents is the reason they increase their coverage.
On the other hand, among those considering shutting down, reducing or switching coverage, 55% say economic uncertainty is the main reason.
“Providing high-quality and affordable health insurance is a key strategy for SMEs to attract and retain talent, especially when it’s getting more and more difficult to find skilled workers who are right for their business. However, Molly Chidester, executive director of Morgan Health News, told Medcity Health News that Molly Chidester poses a huge health care cost and broader economic uncertainty poses a major challenge. Morgan Health is JPMorgan Chase’s business unit focusing on employer-sponsored insurance.
Chidester added that “innovative insurance plan design” may be beneficial for small employers. This includes those offered by Centivo, which offers self-funded employer programs, and Venteur, which offers personal coverage health reimbursement arrangements (ICHRA) solutions. Ichras allows businesses to provide monthly tax-free funding allowances for employees so they can purchase health care services based on their specific needs. Both companies “aim to keep costs low and predictable while helping employees access quality healthcare,” Chidester said.
Morgan Health is an investor in Centivo and Venteur.
The Chase survey also found that many small businesses are turning to AI to support growth: 34% plan to adopt AI tools this year and 80% plan to implement them in 2026. Health and health companies are the furthest in adopting AI, and the possibility of building is less.
Photo: Damon_moss, Getty Images
