A new statewide survey from the Small Business Association of Michigan (SBAM) reveals that rising health care costs are taking a serious toll on the state’s small businesses—directly limiting their ability to hire, expand, and offer competitive employee benefits.
The survey, conducted May 15–22, gathered input from 300 SBAM members. An overwhelming 76% of respondents reported that health care costs are affecting their ability to hire new employees, while more than half—51%—have reduced or even eliminated benefits in response to the financial strain.
“Providing health care benefits is something small business owners take pride in—it’s a way to care for their teams and remain competitive in a tight labor market,” said Brian Calley, President and CEO of SBAM. “But those benefits are increasingly at risk. The cost of care is not just a budget line anymore; it’s a growth roadblock. And now, it’s restricting hiring at a time when Michigan’s unemployment rate is already creeping up.”
Other survey highlights include:
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91% of small business owners say health insurance is essential for employee satisfaction and retention
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84% report that health care and benefits are a major portion of their overall expenses
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83% say high health care costs are limiting their ability to invest in other parts of their business
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67% have seen insurance costs rise more than 10% in just the past year
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70% say those rising costs are a key barrier to offering employee coverage
SBAM board member and former chair Sue Tellier, of JetCo Federal in Grand Rapids, urged collaboration and reform:
“We need everyone involved in health care—insurers, providers, policymakers—to come to the table and get serious about reducing costs. Small businesses operate lean and adapt every day. It’s time the health care system did the same.”
The survey also showed that 84% of respondents operate businesses with fewer than 50 employees, underscoring the disproportionate impact of rising costs on Michigan’s smallest employers.
For more information, visit www.sbam.org.
