Small businesses can’t absorb another billion in health costs

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OPINION – More than half of California adults get their health coverage through an employer. It’s one of the most important benefits businesses offer, and has become one of the hardest to keep affordable.

As a small business owner and President of the California Small Business Association, I know how much employers value offering health coverage to their employees. It helps us attract and retain talent, support healthy teams, and do right by the people who make our businesses succeed.

But rising health care costs make offering health coverage harder every year, and new state policy proposals could make it more difficult than ever.

California has invested significant taxpayer dollars into creating the Office of Health Care Affordability (OHCA), an agency tasked with reining in rising health care costs and promoting long-term affordability. This was a clear signal that the state is serious about making health care more affordable for businesses and workers alike.

Despite this investment and the work being done at OHCA, California lawmakers are advancing a series of proposals that would do the opposite of promoting affordability by adding nearly $1 billion in new health care costs in just the first year alone.

One proposal, which has already been submitted to the federal government for approval, would expand the state’s list of Essential Health Benefits, which are the basic services that health plans are required to cover. At the same time, California lawmakers are pushing forward multiple new health care mandates requiring coverage for specific treatments and services, even if only a small number of people use them. These policies may be well-intentioned, but they come with significant costs that businesses and their workers will be expected to absorb.

That’s why businesses and groups across the state, including chambers of commerce, local business groups, and small and mid-sized employers, have come together to form a new coalition: California Businesses for Affordable Health Care (CABAH). We’re urging lawmakers to oppose these costly health care mandates and consider how they’ll affect the businesses that are trying to keep offering their employees affordable and high-quality coverage.

This is not just a policy debate. It’s a real-world challenge for business owners, especially small businesses. Every time health care premiums go up, small business owners are faced with tough choices: cut benefits, shift more costs to employees, delay hiring, or stop offering coverage altogether. That’s not the future we want for California.

Our coalition is urging lawmakers to oppose all new health care mandates, take a hard look at the cumulative affordability impacts, and listen to the employers who are working every day to provide coverage.

Put affordability first. Protect employer-sponsored health care. And work with us to keep coverage within reach for the people who power California’s economy.

Michael Hedges is the President of the California Small Business Association and the Founder, President, and CEO of Pacific Trux in Signal Hill, California.