If you’re a small business owner with sticker shock over your recent health insurance renewal, you’re not alone. Even more importantly, you don’t have to be without hope.

The Big Picture

In my more than two decades in the Employee Benefits industry, this has been the most challenging health insurance renewal season I have ever experienced. Every group segment is seeing substantial increases, and businesses with 50 or fewer employees are feeling the greatest pain. Premiums for Affordable Care Act (ACA)-compliant small group health plans have a median increase of 11% for 2026, according to a recent analysis by the Peterson-KFF Health System Tracker.

Small business owners and contract/gig workers who are insuring only themselves and their families are seeing even higher rate increases. The median rate increase across all the ACA marketplaces is 18%, and that’s before taking into account the expiration of enhanced premium tax credits. Where I’m at in Nebraska, individuals are facing even larger increases. I’ve seen firsthand how difficult it is for them to absorb these rate increases along with the everyday challenges of being a business owner or independent worker.

What’s the Cause?

There are many factors at play, but most boil down to rising costs and usage. The nation is aging, and that means we’re using more care. New medications, including GLP-1s for diabetes and weight loss, offer exciting benefits but come with high price tags. And, of course, inflation impacts healthcare providers just like everyone else.

The fact that there are no financial penalties for going without health insurance also means that more healthy people are opting out of coverage as prices rise. That means the pool of those with coverage is getting riskier and more expensive to cover.

Ease the Pain

If you’re up against a tight deadline to choose your insurance plan for 2026, there are a few options to consider.

Get with your broker and shop.

I’m working with a half-dozen small businesses right now who are going through their renewal process. We’re looking at all the different options so they’re not just facing an age-banded insurance pool. That’s not an ideal place to be because your employees get older every year, so your rates are guaranteed to go up.

Check to see if you have access to an association health plan.

You may have access to a group health plan without even knowing it. Some chambers of commerce and industry trade groups offer association plans to their members. Check with all of those to see which you or your business may belong. That may be an opportunity to seek coverage at a lower price point.

Consider ICHRA if you haven’t already.

An Individual Coverage Health Reimbursement Arrangement (ICHRA) is when a business pays a set amount into an employee account, and the employee uses that money to buy their own health coverage from an ACA marketplace. We’ve had many small businesses make the jump to ICHRA to get out of the traditional group insurance market.

It can sound scary to direct employees to the exchange, but those clients have had a great experience. Employees get to pick the plan design that works best for them, and some find they can purchase a high-quality plan at a low cost and save a lot of money. Many have chosen to direct some of that money into a health savings account.

If your family is the only one relying on your business for coverage, look into independent contractor and gig-economy options.

There is a small but growing number of insurance plans designed for independent contractors/gig workers, although they often don’t get much attention. If a traditional plan is too expensive, take a look at these as well as catastrophic health plans.

You’ll typically find options that include some level of basic care with in-network protections. They have high deductibles, and some things won’t be covered. (Specialty medications are often among the exclusions.) But if you have an emergency, such as a ruptured appendix, you’ll pay at the contractually discounted rate rather than have to negotiate bills yourself.

Address Healthcare Costs in Your Business Strategy

While these four action items may provide some relief in 2026, business owners need to recognize that the trends driving rate increases are going to continue into 2027 and beyond. This makes addressing health insurance expenses an important part of your ongoing business plan. Health benefits are not only a significant and growing expense; they have a direct impact on your talent strategy.

My best advice: As soon as you’re done with your 2026 renewal, set aside time in the first quarter to do a deep dive into your healthcare strategy. That way, you can put your business in the best situation moving forward. Watch for more details on how to create a first-quarter strategic review in an upcoming article in the Midlands Business Journal I’m working on. And, as always, don’t hesitate to reach out to me or any of our Holmes Murphy Employee Benefits experts to talk with you. We’re happy to jump in and help.