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Small businesses across the United States are facing rising health insurance costs that are putting pressure on operations, employee benefits, and long-term financial planning.
FireflySci, a manufacturer of cuvettes and calibration standards for laboratories, has reported annual increases exceeding $10,000 from its health insurance provider, United Healthcare Oxford.
Sim Woitovich, spokesperson for FireflySci, said the company is struggling to maintain employee benefits as premium costs continue to rise.
Woitovich explained that the company is trying to support its workforce but is encountering significant financial strain that affects decisions on whether to invest in growth or maintain existing benefit levels.
In 2024, the United States experienced a significant increase in health insurance premiums. The average annual premiums rose by 6%, reaching $8,951 for single coverage and $25,572 for family coverage. This uptick was primarily driven by escalating medical costs and heightened utilization of healthcare services.
Small businesses faced notable challenges in managing these rising health insurance expenses. They encountered higher premiums due to limited bargaining power and fewer cost-containment options compared to larger corporations.
Additionally, the increasing prices of prescription drugs and the growing demand for behavioral health services further strained their financial resources.
Looking ahead to the rest of the year, projections indicate a continued upward trend in healthcare costs. Analysts anticipate an 8% year-on-year increase in medical costs for the group market and a 7.5% rise for the individual market.
Factors contributing to this surge include inflationary pressures, higher prescription drug spending, and increased utilization of behavioral health services.
Woitovich said health insurance is a critical component of the company’s compensation package, but the continued increase in costs is reducing the funds available for other areas of the business, including product development and operations.
FireflySci is urging policymakers to explore healthcare reforms aimed at addressing cost escalation for small business employers.
