Survey: Michigan Small Business Owners say Growth Hampered by Health Care Costs

Health care costs are a top concern among small business owners across Michigan, according to the latest membership survey from the Small Business Association of Michigan (SBAM).

The rise in health care costs has companies rebalancing their books and cutting back on hiring new employees.
Seventy-six percent of SBAM members surveyed said the cost of providing health care is affecting their ability to hire more employees, while 51 percent say they’ve had to reduce or eliminate benefits due to costs.

“Small business owners consider providing health care benefits for their employees a source of pride and an important resource for employee attraction and satisfaction,” says Brian Calley, President and CEO of SBAM. “But their ability to provide health care is in jeopardy, due to the excessive growth in costs, and our data now shows it is restricting their ability to hire new employees as well.

“Michigan’s unemployment rate is already nearing its highest point in recent years. If hiring severely contracts, this is a major flag for policymakers and business leadership that the cost of health care is now seriously affecting Michigan’s economy.”

Sue Tellier, of JetCo Federal in Grand Rapids, and past SBAM Board Chair, said: “We desperately need everyone responsible for providing health care to come together and identify actionable strategies to reduce the cost of care across the board. Every day, small business owners find ways to do more with less, and we need health care administrators to use that same logic.”

Other survey findings:

• 91 percent state that providing health insurance is valuable for employee retention and satisfaction
• 84 percent said health insurance and employee benefits costs are significant to their overall expenses
• 83 percent said the cost of health care impacts their ability to invest in other areas of the business
• 67 percent said the cost of health insurance has increased by more than 10 percent this year
• 70 percent said the cost of health care is a significant barrier in their ability to offer coverage as an employee benefit

The survey was conducted from May 15-22, 2025, and had roughly 300 member responses. Overall, 84 percent of respondents have less than 50 employees.

The Lansing-based Small Business Association of Michigan serves more than 32,000 members across the state’s 83 counties. For more information, visit https://www.sbam.org/.