As healthcare costs rise and ACA Marketplace subsidies end, small businesses are stepping away from traditional health insurance. Instead, they’re turning to telehealth as a more affordable option.
Mooresville, United States, February 5, 2026 — Approximately 4.8 million people could lack health insurance this year due to the end of ACA Marketplace subsidies. This change has prompted a significant increase in some 2026 plan premiums, making small businesses particularly vulnerable.
About 48% of people using ACA Marketplace coverage are small business owners or their employees, according to the KFF. Small business owners are three times more likely to rely on these plans compared to other users.
Many small business owners are feeling the pinch. Take chiropractor Eric Frankenfeld and his wife, Lisa. They decided against coverage in 2026 after discovering their ACA plan’s premium would jump from $340 to $1,928 per month. Eric commented, “We’re health care providers who cannot afford benefits. It just doesn’t make financial sense.”
Similarly, Rick Cole, a small business owner in West Virginia, expressed that high healthcare costs have made it hard to keep employees, hurting his business’s profits. For Kathy and Jeffrey Many, who operate a garage door service in Vermont, an insurance premium hike to nearly $2,670 a month pushed them to consider going uninsured, which Kathy called “nerve-wracking.”
According to the Employee Benefit Research Institute, just 49% of employers now offer health benefits, with small businesses leading the trend of dropping coverage. This year, costs for employer insurance are expected to rise by about 9%, surpassing $17,000 per employee—the largest increase in 15 years.
Health insurance expert Dr. Paul Fronstin noted, “If health insurance premiums outpace wages and inflation, small employers will likely face even more financial strain. This could lead to fewer companies offering health insurance.”
In response, many businesses are looking at telehealth as a viable option. While not a replacement for traditional insurance, telehealth can meet basic medical needs and support mental health, helping to ensure a stable workforce. These services, available 24/7, can reduce missed workdays and boost productivity.
Subscription models for telehealth are gaining popularity, offering unlimited access to doctors and therapists for a monthly fee. Wendy Jordan from Jordan Capital Consulting explained, “For small businesses, $40 a month per employee is feasible. This gives them access to a basic level of care without breaking the bank.”
More businesses, including trade associations and local chambers of commerce, see the value in these plans as traditional insurance becomes less accessible.
For nearly half of the nation’s small businesses, paying an average of $17,000 per employee for traditional insurance is unfeasible. Opting for low-cost virtual care options allows them to provide essential support, which can enhance employee retention and contribute to long-term success.
As the landscape of healthcare continues to shift, it’s clear that small businesses must adapt to stay afloat. Telehealth might just be the key to navigating these turbulent waters.
