Small employers are battling rising costs, tariffs and recession concerns. Still, many small businesses are strategizing on how to combat these headwinds, including when it comes to health insurance, according to a recent report from Chase.
The Chase 2025 Midyear Business Leaders Outlook Pulse, released last week, surveyed 563 small business owners in June. It found that inflation is the “number one headache for business owners,” with 32% of respondents selecting this as a top three challenge in 2025. Despite inflation, 40% of businesses said they plan to keep growing, 35% are maintaining and 25% are slowing down. To combat inflation, many are looking to cut back on non-essential spend.
In addition, about a quarter of respondents cited tariffs as a top-three challenge for their business. About 54% said they expect tariffs to hurt profits. Still, 63% are “extremely or very” confident they can mitigate the impact of tariffs. Strategies include switching suppliers and renegotiating contracts.
The survey also found that rising healthcare costs are having an impact on hiring, with 33% of small businesses stating that higher health insurance costs is partially why they’re restraining hiring. Still, about eight in 10 respondents said that they already provide health insurance. Of those who plan to increase coverage, 63% are doing this to provide a higher-quality plan. And about 36% of respondents said that attracting new talent is the reason they are increasing coverage.
On the flip side, of those considering discontinuing, reducing or switching coverage, 55% said that economic uncertainty is the main reason why.
“Offering high-quality and affordable health insurance is a crucial strategy for small and mid-sized businesses to attract and retain talent, especially at a time when finding the right skilled workers for their business is getting harder. Yet, rising health care costs and broader economic uncertainties pose significant challenges,” Molly Chidester, executive director at Morgan Health, told MedCity News. Morgan Health is a JPMorgan Chase business unit focused on employer-sponsored insurance.
Chidester added that “innovative insurance plan designs” can be beneficial for small employers. This includes those provided by Centivo, which offers plans for self-funded employers, and Venteur, which provides Individual Coverage Health Reimbursement Arrangement (ICHRA) solutions. ICHRAs allow businesses to give employees a monthly allowance of tax-free money so they can buy healthcare services for their specific needs. Both of these companies “aim to keep costs low and predictable while helping employees get quality health care,” Chidester said.
Morgan Health is an investor in both Centivo and Venteur.
The Chase survey also found that many small businesses are turning to AI to support growth: 34% plan to adopt AI tools this year, and 80% plan to implement them in 2026. Health and medical companies are the furthest along in adopting AI, whereas construction is less likely to adopt AI.
Photo: Damon_Moss, Getty Images
