The U.S. Department of the Treasury has released new data showing that 3.3 million small business owners and self-employed workers were covered by Affordable Care Act (ACA) Marketplaces in 2022. This group accounted for 28% of all Marketplace enrollment for individuals aged 21-64.
The data indicates that ACA Marketplaces are a significant source of coverage for small business owners and self-employed workers. In 2022, nearly one in five (18%) of these individuals relied on ACA Marketplaces for health insurance, compared to just 6% of the rest of the population within the same age range.
The total number includes 2.7 million small business owners and 1.7 million self-employed workers, with some overlap between these groups. If the share of enrollment remains consistent, an estimated 4.2 million small business owners and self-employed workers would have coverage in 2024.
“The Affordable Care Act has been transformative for millions of small business owners and entrepreneurs who rely on the law for affordable and reliable health care coverage, including 3.3 million in 2022," said U.S. Secretary of the Treasury Janet L. Yellen. "Marketplace enrollment has surged under the Biden-Harris Administration's economic policies, which have made premiums far more affordable for American small businesses and entrepreneurs."
SBA Administrator Isabel Casillas Guzman also commented on the impact: “It is no coincidence that the Biden-Harris Administration has seen a historic Small Business Boom alongside a surge in Marketplace enrollment among small business owners.” She noted that "19.4 million new business applications" have been filed since President Biden took office.
Before the ACA was enacted in 2010, small business owners and self-employed workers had limited options for purchasing affordable, high-quality health coverage. Most Americans obtained health insurance through their jobs, but this was often not an option for those running their own businesses.
The new data confirms that ACA Marketplaces are crucial for providing affordable coverage to this demographic group. The Biden-Harris Administration’s improvements to ACA Premium Tax Credits have also been essential.
The American Rescue Plan Act of 2021 and the Inflation Reduction Act of 2022 enhanced Premium Tax Credits by increasing their size for low- and moderate-income people and expanding eligibility to middle-income individuals facing high premiums. In 2022, over 2.7 million (82%) of small business owners and self-employed workers enrolled in Marketplace coverage claimed the Premium Tax Credit, including about 285,000 taxpayers with incomes over 400% of the poverty level.
However, these improvements are scheduled to expire at the end of 2025, which could put affordable coverage at risk for millions.
This news follows recent data showing that nearly 50 million Americans have been covered through ACA Marketplaces since January 2014. Under the Biden-Harris Administration, efforts to improve affordability have led to a record high of 20.8 million Americans being covered following open enrollment for 2024.
