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It has never been more difficult for employers to offer health insurance for their workers. That’s especially true for America’s small businesses, the backbones of entire communities. More and more, they’re giving up entirely.

America’s employer-based health insurance system — the dominant form of coverage for people younger than 65 — is crumbling. The percentage of working-age adults who get their health coverage from a job has declined from 67% in 1998 to about 60%. It’s also more expensive than ever. STAT interviewed dozens of people across the country as part of a series that probes how and why this is happening. Panic, despair, and anger are most apparent among smaller shops and firms.

The modern workplace is changing faster than most benefits strategies can keep up. Employees are overwhelmed by information, HR teams are stretched thin and employers are under increasing pressure to maximize the return on every dollar spent on benefits. Organizations are investing heavily in everything from healthcare and mental health support to financial wellness tools, condition management and wellbeing programs. Yet there is a persistent and costly disconnect between what is offered and what employees actually use.

The Affordable Care Act landscape is undergoing its most significant shift in years. Enhanced federal premium subsidies, initially expanded under the American Rescue Plan and extended through 2025, expired on Dec. 31, 2025. This returned consumers and employers to the pre-2021 subsidy rules.

As of Jan. 1, millions of Americans face higher premiums, tighter eligibility standards and more complex compliance requirements. Premium spikes in the individual market may reach double-digit or even triple-digit levels for many households now that the enhanced premium tax credits have lapsed.