What We Learned from the 2025 Small Business Benefits Index

Small business healthcare is often measured by whether a company offers benefits. But coverage alone doesn’t tell us whether employees can actually afford or access care.

In 2025, national data from KFF shows that just over half (59%) of small businesses offer a health benefit. At the same time, employees who are covered by insurance are increasingly enrolled in plans with an annual deductible of $2,000 or more for single coverage. This increase in cost-sharing can cause employees to delay or skip care due to cost. 

To better understand how these national trends impact small employers and their teams, Vitable Health launched the Small Business Benefits Index, an annual research initiative designed to capture both employer intent and employee reality.

The 2025 Index surfaced a clear theme: cost, not coverage, is the biggest barrier to care for small business workers.

In this article, we’ll cover:

• Why healthcare access now rivals wages in retention decisions
• Where employer confidence and employee experience diverge
• What small businesses are looking for next in healthcare benefits

How the Small Business Benefits Index Was Conducted

Vitable Health commissioned YouGov PLC to conduct a survey to understand the healthcare experiences of U.S.-based small business and their employees. 510 small employers (those employing fewer than 500 employees) as well as 768 full- and part-time small business employees were surveyed between October and November 2025.

Healthcare Access Impacts Retention & Productivity 

One of the most consistent findings from the Index was how central healthcare has become to workforce decisions.

• 70% of employees say healthcare access influences whether they stay in a job
• Nearly 45% would choose reliable healthcare coverage over a $0.50/hour raise

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Healthcare is no longer just a benefit. It’s a stabilizing force for small teams.

The productivity impact is also meaningful. Employees reported nearly three days of missed work due to health issues, and an additional 2.2 days of presenteeism—or working while sick. That adds up to nearly one full workweek of lost productivity per employee each year.

Coverage Doesn’t Always Equal Care

Many employers believe their benefits are working. The data shows it’s more complicated. While nearly half of employers surveyed expressed confidence that their employees received preventative care, only two-thirds of employees surveyed had an annual checkup in the past year. Additionally: 

• 40% of employees skipped or postponed needed care in the past year
• Only 30.2% of employees completed recommended preventive screenings

• 62% of employees cited cost as the primary reason for delaying care

Employers Want Better Options Without More Complexity

While many small business owners struggle to offer health benefits due to cost, they are open to newer models that offer more flexibility and cost control. In fact, more than 40% of employers say they’re likely to consider alternative healthcare models, such as direct primary care or defined-contribution benefits like ICHRA.

The factors that matter most to employers include:

• Faster return-to-work times
• Higher preventive care utilization
• Fewer emergency room and urgent care visits

The takeaway: employers want healthcare that works, without adding administrative burden.

What This Means for Small Businesses

The 2025 Small Business Benefits Index reinforces a broader narrative: small employers and their employees are underserved by traditional health insurance options. Predictable costs, real access to care, and prevention-first models are essential for improving retention and productivity, and supporting better health outcomes.

If you’re rethinking your benefits strategy—or wondering whether your current approach is actually working for your employees—Vitable Health can help. 

If you’re an employer or broker navigating rising costs, disengaged employees, or benefits that look good on paper but don’t work in practice, we’d love to talk.

Contact us to discuss what these findings mean for your business, and what better healthcare could look like in 2026 and beyond.