Mooresville, United States, 5 February 2026 — Facing rising healthcare costs and the expiration of ACA Marketplace subsidies, many small businesses across the United States are abandoning traditional health insurance and turning to telehealth as a more affordable alternative. Experts warn that the shift could leave millions uninsured while fundamentally changing the way small enterprises provide healthcare support to their employees.
An estimated 4.8 million Americans could go without health coverage this year following the termination of ACA Marketplace subsidies on 31 December 2025. The loss of financial assistance has caused some 2026 plan premiums to increase sharply—often several-fold—placing the heaviest burden on small businesses.
According to KFF, a nonpartisan health policy research organisation, 48% of adults enrolled in ACA Marketplace plans are either small business owners, their employees, or self-employed individuals. Small business owners are three times more likely than other enrollees to rely on Marketplace coverage.
Sudden Coverage Loss Hits Small Businesses
Chiropractor Eric Frankenfeld and his wife, office manager Lisa, decided to forgo coverage in 2026 after learning that their ACA Marketplace plan would rise from $340 per month to $1,928. “We are healthcare providers who cannot afford benefits. Purchasing a plan doesn’t make financial sense. We’re just going to cross our fingers and hope for the best,” Eric remarked.
Similarly, Rick Cole of Martinsburg Service, West Virginia, observed, “High healthcare costs for small businesses like mine have cost us employees, made it difficult to recruit, reduced our net profits, and put enormous strain on our work families.”
In Brandon, Vermont, Kathy and Jeffrey Many, owners of a garage door business, faced a jump from $625 to nearly $2,670 per month. “Being uninsured will be very nerve-wracking,” Kathy admitted.
Declining Employer-Sponsored Coverage
A national study by the Employee Benefit Research Institute (EBRI) shows that only 49% of employers currently provide health benefits, with small businesses dropping coverage most rapidly. With healthcare costs projected to rise by 9% in 2026, the average employer expense per employee is expected to surpass $17,000—the largest increase in 15 years.
| Expense Type | 2025 (Average) | 2026 (Projected) | Increase (%) |
|---|---|---|---|
| Health Insurance Premium | $15,600 | $17,000 | 9% |
| Medication & Care Costs | $2,500 | $2,700 | 8% |
| Total Healthcare Cost | $18,100 | $19,700 | 8.8% |
Paul Fronstin, Ph.D., EBRI’s director of Health Benefits Research, explained, “If premiums rise faster than wages and general inflation, small employers may face intensified financial strain, accelerating the erosion of health plan sponsorship among firms with fewer than 100 workers.”
Telehealth as a Cost-Effective Solution
In response, many small businesses are exploring telehealth subscription models as an alternative to traditional insurance. These packages provide 24/7 access to doctors and mental health professionals for a fixed monthly fee, covering essential medical needs and supporting employees’ well-being.
Wendy Jordan of Jordan Capital Consulting, which brokers such plans, said, “When conventional insurance isn’t financially viable, $40 a month per employee allows small businesses to provide basic care for their teams and families.” She added that trade associations and chambers of commerce are increasingly offering these services to their members, recognising the rising demand for alternative health options.
For nearly half of small businesses, traditional insurance at $17,000 per employee is unaffordable, but lower-cost telehealth models allow employers to offer essential healthcare, maintain workforce stability, and ensure long-term sustainability.