If you’re an employer, offering health insurance is one of the best ways to attract and retain employees—but how much does it actually cost? 🤔
The price varies based on company size, plan type, and how much you contribute. Let’s break down real costs and what to expect when covering employee health insurance.
💰 Average Cost of Employee Health Insurance
Coverage Type |
Employer Cost (Per Employee, Per Month) |
Employee Cost (Per Month) |
|---|---|---|
Single Coverage |
$400 – $650 |
$100 – $200 |
Family Coverage |
$1,000 – $1,800 |
$400 – $600 |
🔹 On average, employers cover 70-80% of premiums, while employees cover the rest.
🔹 Family plans cost more, but many companies offer tiered contribution rates (e.g., paying more for employees and less for dependents).
🏢 Cost by Business Size
Small businesses pay different rates than large corporations. Here’s how size impacts health insurance costs:
Company Size |
Average Employer Cost Per Employee (Annually) |
|---|---|
Small Business (1-50 Employees) |
$5,000 – $9,000 |
Mid-Sized Business (51-500 Employees) |
$6,500 – $11,000 |
Large Corporation (500+ Employees) |
$7,500 – $12,500 |
💡 Small businesses often qualify for tax credits through the Small Business Health Options Program (SHOP) to lower costs.
🏥 Health Insurance Costs by Plan Type
The type of plan you offer makes a huge difference in cost.
Plan Type |
Employer Cost (Per Employee, Per Month) |
Employee Cost (Per Month) |
|---|---|---|
HMO (Health Maintenance Organization) |
$400 – $600 |
$100 – $250 |
PPO (Preferred Provider Organization) |
$500 – $750 |
$150 – $300 |
HDHP (High Deductible Health Plan) |
$300 – $550 |
$75 – $200 |
EPO (Exclusive Provider Organization) |
$450 – $700 |
$120 – $280 |
🔹 HDHPs have lower premiums but require employees to pay more out-of-pocket before coverage kicks in.
🔹 PPOs cost the most but offer the most flexibility in provider choice.
💰 How Much Do Employers Have to Pay?
✅ Employers aren’t required to offer health insurance unless they have 50+ employees (per the Affordable Care Act).
✅ If you offer coverage, you must pay at least 50% of the employee’s premium (but not dependents).
✅ Many companies cover 70-80% of premiums to stay competitive in hiring.
💸 How to Reduce Health Insurance Costs
Want to save money while offering great coverage? Try these strategies:
✅ Use SHOP for Small Businesses – Tax credits cover up to 50% of premiums.
✅ Offer an HDHP + HSA Option – High deductible plans cost less and let employees save tax-free.
✅ Compare Plans Annually – Insurance rates change—shop around to get the best deal.
✅ Wellness Programs – Offering incentives for fitness & health can lower future premiums.
✅ Negotiate Group Rates – The more employees you cover, the better rates you can negotiate.
🤔 Is Employee Health Insurance Worth It?
✅ Helps attract & retain top talent
✅ Boosts employee productivity & satisfaction
✅ Offers tax advantages for your business
✅ Keeps your workforce healthier & reduces absenteeism
While health insurance is a big expense, it’s one of the most valuable benefits you can offer employees—and there are ways to lower costs while keeping coverage competitive.
👉 Thinking about offering employee health insurance? Drop your questions in the comments! 💬
