Survey results from Meridio · Summer 2026

Challenges of Offering Health Benefits in Today’s Market

Insights from business executives and HR leaders across the nation.

Executive Summary

The health benefits market is becoming increasingly challenging for businesses, with rising costs, growing complexity, and fewer affordable options.

Meridio sees these challenges firsthand through our work in helping smaller and growing businesses nationwide with health benefit solutions. To validate what we hear every day, we surveyed business leaders and HR decision-makers across the country. The findings reinforced two clear realities:

  • 87% offer benefits primarily to support recruitment and retention
  • Cost is the #1 challenge for businesses offering benefits—and the top reason others don’t

What stood out was how few businesses actively explore their options: 74% of those offering benefits shop once a year, while 33% of those without benefits never explore options. In a changing market, staying informed matters.

We invite you to explore the survey results and see what they mean for your operations.

Survey Participants

Survey respondents represent a broad cross-section of U.S. small businesses, with strong representation from business owners and executive leaders. The majority are businesses with fewer than 50 employees (80%), primarily W-2 workforces (84%), and operations concentrated within a single state (77%).

Size of teams

1–49 employees — 80%50–100 employees — 4%101+ employees — 16%
  • 80%1–49 employees
  • 4%50–100 employees
  • 16%101+ employees

Locations

In-state — 77%Multi-state — 23%
  • 77%In-state
  • 23%Multi-state

Workforce composition

W-2 employees
84%
1099 contractors
40%

Survey Responses: Businesses that Offer Insurance

Among businesses that currently offer health benefits, recruitment and retention are the primary reasons (87%), yet nearly half report less than 50% employee participation. While outside coverage plays a major role, 37% say current costs and benefit options don’t meet employees’ needs, highlighting an opportunity to offer more affordable, relevant benefits that better support hiring and retention.

87%
of businesses say their top reason for offering health benefits is to support recruitment and retention.

Current Health Benefits Helping or Hurting Hiring & Retention?

Helping — 53%Hurting — 11%Unsure — 36%
  • 53%Helping
  • 11%Hurting
  • 36%Unsure

Participation in health benefits

More than 50% — 51%Less than 50% — 47%Unsure — 2%
  • 51%More than 50%
  • 47%Less than 50%
  • 2%Unsure

Acquiring & Managing Benefits

Cost and coverage are the biggest pain points, with affordability (85%) and network coverage (79%) driving benefits decisions. While most businesses spend little time managing benefits, 30% say the burden is increasing, highlighting an opportunity for simpler, more flexible solutions and stronger administrative support.

How businesses provide benefits

Broker — 43%Managed service provider — 22%PEO — 18%Stipend / reimbursement / other — 17%
  • 43%Broker
  • 22%Managed service provider
  • 18%PEO
  • 17%Stipend / reimbursement / other

Top challenges faced this past year

Higher premium costs
85%
Coverage not comprehensive enough
51%
Difficulty finding in-network providers
36%
40%
of businesses spend 2–5+ hours managing benefits every week.

Time spent managing benefits each week

Under 1 hour — 53%2–4 hours — 34%5+ hours — 6%Unsure — 7%
  • 53%Under 1 hour
  • 34%2–4 hours
  • 6%5+ hours
  • 7%Unsure

How often businesses shop for benefits

Once a year — 74%Rarely — 15%Multiple times a year — 11%
  • 74%Once a year
  • 15%Rarely
  • 11%Multiple times a year

Top 3 priorities when shopping for benefits

Price / affordability
85%
Network coverage
79%
Plan types (PPO, HRA, HSA, etc.)
66%

Prescription coverage and options for all team members (W-2, part-time, 1099) each ranked at roughly 21%, with the value of administrative and participant support at 9%.

Survey Responses: Businesses that Don’t Offer Insurance

Cost is the biggest barrier to offering health benefits (73%), alongside uncertainty about where to start and how to manage options. Compared with businesses already offering benefits, these organizations place an even greater emphasis on affordability (94%), while network coverage and plan flexibility rank lower, underscoring the need for simple, affordable solutions that make getting started easier.

Top 3 reasons businesses don't offer insurance

High costs / increasing premiums
73%
Employees are part-time or 1099
37%
Not sure where to start
35%

Contribution requirements, time to manage, and figuring out options also ranked high among the reasons.

Difficulty of Recruitment & Retention without Health Benefits?

Yes — 30%No — 31%Unsure — 39%
  • 30%Yes
  • 31%No
  • 39%Unsure

Frequency of health benefit exploration?

Rarely
45%
Once a year
24%
Multiple times a year
18%
Never
14%

The top three priorities for organizations if shopping for benefits, compared with those that already offer them:

PriorityDon't offerCurrently offer
Price / affordability
94%
85%
Network coverage
51%
79%
Plan types (PPO, HRA, HSA, etc.)
47%
66%

Survey Responses: All Participants

Awareness of alternative health benefit strategies is relatively high, particularly among organizations that have explored self-funded (69%), ICHRA (47%), and level-funded plans (44%). However, uncertainty remains around major industry changes, with 31% unsure whether the expiration of ACA Marketplace subsidies will impact their organization, highlighting a need for clearer education and guidance on emerging options and market trends.

Expiration of ACA Marketplace subsidies impact your team or organization?

Yes — 37%No — 32%Unsure — 31%
  • 37%Yes
  • 32%No
  • 31%Unsure

Explored these health insurance options?

Self-funded plans
69%
ICHRA (Qualified Small Employer HRA)
47%
Level-funded plans
44%
Section 125 plans
33%
Managed Service Providers (MSPs)
31%
Captive health insurance
18%

How Participants Described the Market

When describing the health benefits industry, businesses consistently report rising costs, limited coverage, complexity, and lack of transparency as major frustrations, with smaller businesses feeling particularly disadvantaged.

Premiums increase 10–25% annually with no added value. It is not sustainable.
The industry needs more transparency in pricing and coverage.
I think navigating the system as a whole can be challenging.
Too expensive, too limited, too complicated.
I appreciate health insurance, but navigating it can be frustrating.
The smaller you are, the more expensive healthcare benefits are.
Health benefits are usually expensive and don’t fit the needs of everyone in the workplace.
Traditional healthcare has become unattainable for small to medium-size businesses.

In Conclusion

Health benefits continue to be a significant challenge for businesses, with smaller organizations often facing greater cost, complexity, and resource constraints. At the same time, benefits remain an important part of supporting employees, making it critical for employers to understand their options and stay informed as the market continues to evolve.

Key takeaways

  • Affordability is the biggest challenge
  • Benefits remain critical to attracting and retaining talent
  • Understanding options and having the right guidance is more important than ever

Resources to Support Your Journey

  • Benefits Strategy Guide A practical resource to help you better understand your health benefit options and evaluate what may be right for your business.
  • Health Benefits Webinar Join us September 17 for an overview of the latest industry updates, key considerations, and strategies to help you plan ahead.
  • KFF An independent source for research, data, and insights on the U.S. health insurance and benefits landscape.
  • Meridio Benefits Assessment Get a closer look at your current benefits approach and explore opportunities to better align costs, coverage, and your business goals.

Having the right partner can make the difference.

Whether you’re evaluating benefits for the first time or looking for ways to improve your current approach, the right guidance can help you find solutions that align with your business and your employees’ needs.

Take the Next Step

Whether you’re offering benefits now or just exploring, a quick assessment can help you align cost, coverage, and your goals. No pressure, no jargon.

Get a benefits assessment

Findings reflect responses from business executives and HR decision-makers at U.S. organizations, primarily under 50 employees, gathered in a summer 2026 Meridio survey. Some questions allowed multiple selections, so those totals can exceed 100%; figures are directional and rounded.