PA small businesses face rising health care costs if tax credits expire

Unless Congress acts, enhanced Affordable Care Act premium tax credits will expire at year’s end, leaving small businesses in Pennsylvania and across the country bracing for higher health care costs.

A new survey found 84% of small-business owners fear they will be unable to afford coverage in 2026 if the credits lapse.

Walt Rowan, owner of the 115-year-old, four-generation Susquehanna Glass Company in Southeast Pennsylvania, explained higher costs made his small business stop offering employee health insurance. Instead, he helped his employees enroll in Affordable Care Act plans. However, changes to the subsidies will make the programs less affordable for his workers.

“With the ACA tax subsidies, they were getting very good, affordable health insurance,” Rowan noted. “I’ve already seen one of my employees receive their change in subsidies, and there’s a 30% increase to that policy for that person, and that just is not affordable to any of us.”

Rowan warned cutting subsidies could trigger a crisis for workers in small businesses, which employ 50% of Americans. The new Small Business for America’s Future survey revealed 72% of owners say Congress’ priorities do not match their needs and want tax credits made permanent. The federal tax subsidy for Affordable Care Act premiums remains unsettled, with Democrats pushing to preserve them.

Rowan pointed out his company typically has between 35 and 50 employees, with additional staff joining during the holiday season. He said most workers, depending on their income and family size, qualified for subsidies which made insurance premiums more affordable. He added health insurance rates, including employer and Pennie marketplace plans, are rising around 20%, and if subsidies are cut, people paying $300 to $400 a month could see much higher premiums.

“I have people that are looking at having health insurance now going up to be over $1,000,” Rowan reported. “That is absolutely insane.”

The survey also found as rising health care costs hit small businesses, 41% said they would raise prices, 22% would consider freezing hiring, 20% would cut jobs and 37% fear going out of business.

Related: Why health care costs will skyrocket in Pennsylvania