Senate ACA Proposal Would Rescue Many Small Businesses From Healthcare Cliff

“The U.S. Senate must maintain essential support for small businesses by voting to extend the enhanced premium tax credits (EPTCs) for three years. The EPTCs, which lower monthly premiums for health insurance plans purchased through the Affordable Care Act (ACA) Marketplace, have been a lifeline for many small businesses and their employees. In 2025 alone, more than 4.4 million out of 5.2 million small business owners and self-employed entrepreneurs enrolled in coverage through the Marketplace received the enhanced premium tax credit. Without the EPTCs, however, KFF estimates that ACA marketplace enrollees would pay 114% more on average for their monthly healthcare premiums. 

Since more than half of all ACA Marketplace enrollees are small business owners, self-employed entrepreneurs or small business employees, an astronomical jump in health insurance expenses would force a significant percentage of small business owners to reduce their health coverage or drop insurance entirely. If those decisions are made, a large number of small business owners would be forced to close their businesses and go work for someone else because they cannot afford access to health insurance on their own. Furthermore, many small business employees using the ACA exchanges may seek out employers that can afford to offer group coverage. Even small businesses that choose to continue coverage despite skyrocketing costs will face negative effects as they will have less money available to invest in their businesses. 

Any legislation that does not include a clean extension of the EPTCs would not go far enough to help small businesses maintain access to quality healthcare. Alternatives to the EPTCs, such as health savings accounts (HSAs), would not stop healthcare premiums from doubling on average. If the EPTCs expire, HSAs are unlikely to offer individuals enough money to make up for the loss of the tax credits. What’s more, healthier individuals would see the biggest increase in overall costs since they would get little benefit from extra cash in an HSA to cover the out of pocket expenses. Many of those individuals would likely choose to forego insurance, which could imbalance insurance market risk pools and drive up costs for everyone who remains in the ACA Marketplace.    

Small Business Majority’s research has found that two-thirds of small business owners say that increasing healthcare premiums places at least a moderate financial burden on their businesses, and 74% say they support extending the EPTCs. For the sake of Main Street, we implore lawmakers to act in the best interest of America’s entrepreneurs by renewing the enhanced premium tax credits before they expire in a matter of weeks.”