Mooresville, United States, 5 February 2026 – A growing number of small businesses across the United States are abandoning traditional health insurance in favour of telehealth services, as rising healthcare costs and the recent expiry of ACA Marketplace subsidies place unprecedented financial strain on employers. Experts estimate that up to 4.8 million Americans could become uninsured in 2026 as a direct result of these developments.
The end of ACA subsidies on 31 December 2025 has led to a dramatic increase in plan premiums, with some rising multiple times their previous levels. Small businesses, in particular, are feeling the pinch. According to the nonpartisan Kaiser Family Foundation (KFF), 48% of adults enrolled in ACA Marketplace coverage 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 the Marketplace for health coverage.
Sudden Coverage Loss Hits Small Employers
Chiropractor Eric Frankenfeld and his wife, office manager Lisa, decided to forego coverage in 2026 after discovering that their ACA Marketplace plan would increase from $340 per month to $1,928. “We are healthcare providers who cannot afford benefits. The irony is staggering,” Eric said. “Purchasing a plan simply doesn’t make financial sense. We’re just going to hope for the best.”
Rick Cole, owner of Martinsburg Service in West Virginia, added: “High healthcare costs have forced us to lose employees, made recruitment more difficult, reduced our net profit, and placed enormous strain on our work families.” Meanwhile, Kathy and Jeffrey Many, who run a garage door business in Brandon, Vermont, learned their plan would jump from $625 last year to nearly $2,670 per month. Kathy described going uninsured as “very nerve-wracking.”
Health Benefits Dropping Nationwide
A recent report by the Employee Benefit Research Institute (EBRI) reveals that only 49% of employers currently offer health benefits to their workforce, with small businesses discontinuing coverage at the fastest rate. Industry forecasts indicate that employer health costs per employee are projected to surge by 9% in 2026, surpassing $17,000 on average — the largest increase in 15 years.
| Indicator | Statistic |
|---|---|
| Adults with Marketplace coverage who are small business-related | 48% |
| Employers offering health benefits | 49% |
| Projected average health cost per employee (2026) | $17,000 |
| Projected annual premium increase | 9% |
Paul Fronstin, Ph.D., director of Health Benefits Research at EBRI, warned: “If premiums rise faster than wages and general inflation, small employers are likely to face intensified financial pressure, accelerating the decline of health plan sponsorship among firms with fewer than 100 workers.”
Telehealth as a Cost-Effective Solution
In response, many small businesses are turning to telehealth subscription models as an affordable alternative. While not a substitute for traditional insurance, telehealth packages cover basic medical care and mental health support, reducing absenteeism and improving staff wellbeing. Services are available 24/7, 365 days a year, with unlimited access to doctors and therapists for a flat monthly fee, often around $40 per employee.
Wendy Jordan of Jordan Capital Consulting, which brokers telehealth plans, explained: “When traditional insurance isn’t financially viable, these plans allow small businesses to provide essential care for their teams and families. Increasingly, trade associations and local chambers of commerce are adopting these plans to offer members practical healthcare solutions.”
For nearly half of U.S. small businesses, conventional health insurance at $17,000 per employee is financially out of reach. Yet, lower-cost virtual care is helping employers maintain a basic level of support, retain staff, and secure long-term business sustainability.