America’s small businesses are the backbone of our economy. They create two-thirds of new jobs, power innovation, and anchor communities across the country. But that backbone is under real strain. Rising healthcare costs dominate the headlines, but what’s missing from the conversation is how deeply they impact the small businesses that keep our economy running.

At Gusto, we see this strain firsthand. Our latest Small Business Jobs Report showed hiring slowed in November as owners continue to navigate higher costs and uncertainty. Rising healthcare premiums aren’t the only challenge, but they’re making it that much harder to grow and hire with confidence.

Since 2022, small business health insurance costs have climbed 23% since 2022—far faster than inflation or wage growth. For the smallest employers, those with just two to five employees, the increase is even steeper: up 18%, reaching nearly $8,500 per worker. Looking ahead to 2026, premiums are projected to rise another 9.5%, the

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