For Arizona business owners and employers, healthcare is no longer simply an employee benefit. It is increasingly becoming a factor in decisions around hiring, retention, productivity and long-term growth.

For many small business owners and self-employed individuals, access to affordable health coverage can directly influence whether they are able to build and sustain a business. Arizona has more than 500,000 self-employed workers, and nearly one in four individuals relying on Affordable Care Act coverage is tied to a small business. As the cost of coverage continues to change, the impact extends beyond individual households and into the broader business community.

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When health care becomes more expensive, employers can face difficult decisions about what they can offer employees while managing their own operating costs. Rising health care costs can add pressure to already tight margins and make it more difficult for businesses to balance compensation, benefits and growth.

The impact can also extend to hiring and retention. Benefits are an important consideration for employees, and when coverage becomes more difficult for businesses to maintain, employers may have fewer tools available to attract and retain talent. At the same time, employees facing higher health care and other living expenses may require higher wages, creating additional pressure for employers.

Health care access can also have an impact on productivity. When employees delay care because of cost, health issues that could have been addressed earlier may become more significant. That can lead to longer absences and disruptions that affect staffing and day-to-day operations.

These challenges are particularly important for Arizona’s small and mid-sized businesses. Unlike larger companies, smaller employers may have fewer resources to absorb rising costs or adjust their benefits strategies. Health care expenses can therefore influence decisions about hiring, expansion and how quickly a company can grow.

The connection between health care and entrepreneurship is another important consideration. When individuals are hesitant to leave traditional employment because they are concerned about losing access to health insurance, health coverage can become a barrier to starting a business. That has implications beyond the individual entrepreneur, potentially limiting innovation and economic activity across the state.

Business leaders should therefore view health care as part of broader workforce and business strategy. Understanding available coverage options, having conversations with employees about affordability and considering how changes in health care costs may affect hiring and retention can help businesses prepare for an evolving landscape.

There is no single solution to the challenges facing Arizona employers. But the connection between health care access and business stability is becoming increasingly difficult to overlook. As the state’s health care landscape continues to change, business leaders who recognize that connection will be better positioned to navigate its impact on their workforce, operations and long-term growth.

Author: Robert Hess III is the founder of Hess III Consulting.