# How much does employee health insurance cost per month?

Source: https://www.getprescience.com/guides/average-employee-health-insurance-cost
Author: Aditya Jain, MD, Cofounder and COO, Prescience
Published: 2026-10-06
Updated: 2026-10-13
Cite as: Aditya Jain, MD. "How much does employee health insurance cost per month?." Prescience, October 13, 2026. https://www.getprescience.com/guides/average-employee-health-insurance-cost

The average employer health plan cost about $777 per month for single coverage and $2,249 per month for family coverage, based on KFF's 2025 survey. Employers paid most of it: about $657 a month for a single employee and $1,679 for a family. Your own number depends mostly on your state, your team's ages, how many people cover dependents and the plan level you pick.

- **Single coverage:** $777/month ($9,325/year)
- **Family coverage:** $2,249/month ($26,993/year)
- **Employer share, single:** About $657/month
- **Employer share, family:** About $1,679/month

## The national averages, per month

**Average employer health premiums, 2025 (KFF), converted to monthly; each monthly value rounded independently**

|  | Total premium | Worker pays | Employer pays |
| --- | --- | --- | --- |
| Single coverage | $777 | $120 | $657 |
| Family coverage | $2,249 | $571 | $1,679 |

Annual figures from KFF: $9,325 single and $26,993 family, with workers contributing $1,440 and $6,850 on average. Single premiums rose 5% and family premiums 6% in a year. Over five years, family premiums grew 26%, a little below wage growth (28.6%) and a little above inflation (23.5%).

_Chart: Bar chart of average monthly employer health premiums in 2025: $777 single with $657 paid by the employer, and $2,249 family with $1,679 paid by the employer._

One change to know about: starting with 2025, KFF's survey covers firms with 10 or more workers. Teams of 3–9 are no longer in the averages, so a very small company should treat these figures as a reference point, not a quote.

## Small firms pay about the same premium but shift more to families

Premiums at small firms (10–199 workers) are close to those at large firms. The real difference is who pays. Small employers ask workers with families to pay a much larger share.

**Premiums and worker contributions by firm size, 2025 (KFF)**

|  | Small firms (10–199) | Large firms (200+) |
| --- | --- | --- |
| Single premium, per year | $9,211 ($768/month) | $9,361 ($780/month) |
| Family premium, per year | $26,054 ($2,171/month) | $27,280 ($2,273/month) |
| Worker share, single | 16% | 16% |
| Worker share, family | 36% | 23% |
| Worker pays for family, per year | $8,889 ($741/month) | $6,227 ($519/month) |
| Workers who pay more than half the family premium | 29% | 5% |
| Average single deductible | $2,631 | $1,670 |

KFF reports that 53% of covered workers at firms with 10–199 workers have a single deductible of at least $2,000, versus 28% at larger firms. The average deductible row excludes workers without a general deductible. Compare both paycheck deductions and point-of-care costs rather than using premium alone.

## What coverage costs in your state

A state average cannot predict a specific employer quote. Rating area, enrollment ages, covered dependents, network and policy benefits all matter. I would use national survey figures for an initial planning range, then replace them with quotes based on the same census and effective date. Do not add an arbitrary city surcharge or assume that every rural plan costs less.

**What to collect for a location-specific comparison**

| Input | What to verify | Why it matters |
| --- | --- | --- |
| Employer location | Correct business address and applicable rating area | The insurer applies its geographic rating rules |
| Remote employees | Eligibility and routine network access in every employee location | A headquarters quote does not establish usable coverage elsewhere |
| Ages and dependents | Accurate birth dates and requested covered family members | Age-rated and family-tier methods produce different bills |
| Product | Exact plan, network, formulary and effective date | A state average mixes products and enrolled populations |
| Contribution | Employee-only amount and treatment of incremental dependent cost | Employer spending differs from total premium |

For a multi-state team, ask the insurer how it assigns the group rating area and whether every employee can enroll in the proposed product. State rules also affect permissible age and tobacco variation. See our guides for [California](https://www.getprescience.com/small-business-health-insurance/california), [New York](https://www.getprescience.com/small-business-health-insurance/new-york) and [Texas](https://www.getprescience.com/small-business-health-insurance/texas), then verify the specific policy available to your company.

## Cost by plan type

**Average premiums and single deductibles by plan type, 2025 (KFF)**

| Plan type | Share of covered workers | Single premium | Family premium | Average single deductible |
| --- | --- | --- | --- | --- |
| PPO | 46% | $9,818 ($818/month) | $28,272 ($2,356/month) | $1,337 |
| HDHP with savings option | 33% | $8,620 ($718/month) | $25,379 ($2,115/month) | $2,609 |
| HMO | 12% | Not in KFF summary | Not in KFF summary | $1,649 |
| POS | 9% | Not in KFF summary | Not in KFF summary | $2,122 |

The PPO and HDHP/SO single-premium averages differ by about $100 monthly, but they represent different enrolled populations and benefit designs. This is not a guaranteed saving for switching the same group. KFF's $690 average employer HSA contribution is for single coverage in HSA-qualified HDHPs and includes workers whose employer contributes nothing. Deductible averages exclude workers without one.

## Why your quote is probably different

- **Location.** Obtain the actual plan rate for the applicable area. Local provider contracts and the available products matter, but a city name alone does not justify a particular premium.
- **Ages.** Small group rates may rise with age, up to three times for a 64-year-old compared with a 21-year-old. Under the federal default age curve, a 40-year-old costs about 1.28 times a 21-year-old.
- **Tobacco.** Federal rules allow up to a 1.5:1 ratio where state law permits it; small-group tobacco rating is also subject to wellness-program requirements.
- **Plan benefits.** Metal levels describe actuarial value, not identical deductibles or networks. Compare actual premiums and service-level cost sharing.
- **Dependents.** Family coverage costs roughly three times single coverage. Two or three employees with families can move your average a lot.
- **Buying route.** Include separately quoted broker, administration or PEO service fees. Do not treat hypothetical first-year discounts or renewal increases as market facts.
- **Market and funding arrangement.** ACA-compliant small-group premiums cannot vary by the group's health status or claims. Large-group and underwritten products use different methods. Confirm which rules apply before interpreting a renewal.

**How age alone changes one plan's price (illustrative)**

Assumes one small group plan where a 21-year-old's rate is $450 a month, priced on the federal default age curve.

- Age 21 (factor 1.000): $450/month
- Age 40 (factor 1.278): $575/month
- Age 64 (factor 3.000): $1,350/month

Same plan, same network, three times the price. A team of 28-year-old engineers and a team with several people in their fifties can see very different quotes for identical coverage.

## Three illustrative team budgets

The following fictional budgets demonstrate arithmetic only. Dollar rates are selected assumptions, not measured city or state averages, actual quotes or customer information. Each assumes full employee-only payment plus half of the incremental dependent cost. The locations identify scenarios, not expected local prices. Actual ages, benefit design, fees and enrollment can change every result.

**5-person team in Austin, everyone on single coverage**

Illustrative single premium: $712 monthly; five enrolled employees and full employer payment. No separate fees.

- 5 × $712: $3,560/month
- Employees pay: $0
- Company cost per year: $42,720

The company pays $8,544 per enrolled employee annually. Tax treatment depends on employee and owner status; use the gross expense for cash planning before considering any deduction.

**12-person team in Denver, 3 employees cover families**

Fictional monthly rates: $735 single and $2,088 family. Twelve enrollees, including three families. Incremental dependent cost is $1,353 and the company pays half, $676.50. No separate fees.

- Employee-only coverage, 12 × $735: $8,820/month
- Half of dependent cost, 3 × $676.50: $2,029.50/month
- Company total: $10,849.50/month ($130,194/year)
- Each family employee pays: $676.50/month

About $10,850 per employee per year on average. The dependent share is about 19% of the company's bill.

**30-person team in New York, 8 employees cover families**

Fictional monthly rates: $909 single and $2,479 family. Thirty enrollees, including eight families. Incremental dependent cost is $1,570 and the company pays half, $785. No separate fees.

- Employee-only coverage, 30 × $909: $27,270/month
- Half of dependent cost, 8 × $785: $6,280/month
- Company total: $33,550/month ($402,600/year)
- Each family employee pays: $785/month

About $13,420 per employee per year. Moving dependents from 50% to 100% would add $75,360 a year; moving to 75% would add $37,680.

To model your own split, see [how much employers pay for health insurance](https://www.getprescience.com/guides/how-much-do-employers-pay-for-health-insurance), which compares 50%, 75%, 100% and flat-dollar contributions line by line.

> **Prescience Choice: ICHRA for $20 per enrolled employee per month.** Would rather set the number than accept a rate? With Choice, the company's cost per employee is the allowance you pick, plus $20 a month for each enrolled employee.
> - **You set a monthly allowance;** each employee picks and owns an individual plan
> - **$20 per enrolled employee per month,** with no setup or platform fee
> - **Works in all 50 states and DC,** so remote and multi-state teams fit
> - **Plan comparison, enrollment help and Crystal,** our assistant for benefits questions
> Best for small teams, teams in several states, and anyone pricing ICHRA. [Get a Choice quote](https://www.getprescience.com/employer/choice)

## Estimate your own cost in 15 minutes

1. **List who would enroll** Collect the census securely, including eligible employees and likely enrollment tiers. Record valid waivers for participation purposes rather than silently removing everyone with another possible coverage source.
2. **Pick a starting rate** Use the published national average only as a labeled provisional input. Ask for rates based on your census and intended start date. Do not assume a fixed adjustment for age or city without the applicable rating method.
3. **Choose a contribution policy** Specify the amount for employee-only coverage and the formula for dependents. Show both employer monthly expense and employee payroll deduction for every tier. Check carrier requirements and applicable affordability rules.
4. **Add fees and a renewal** Add all quoted fees and model several hypothetical future increases. Separate a renewal-rate assumption from hiring and coverage-tier changes so the budget owner can see why spending changes.
5. **Get two or three real quotes** Ask for quotes on the same census from at least two routes (for example a carrier small group plan through a broker, a PEO and a newer option like ours). Compare total annual cost and the deductible and out-of-pocket maximum side by side, not premium alone.

> **Don't forget the money that stays in your pocket:** Qualified employee health coverage generally receives favorable federal income and payroll tax treatment. Owners and other special cases differ, and an income-tax deduction is not a dollar-for-dollar refund. See [how much employers pay](https://www.getprescience.com/guides/how-much-do-employers-pay-for-health-insurance) for an explicitly assumed tax comparison.

## Where the money goes

Federal medical loss ratio rules generally require insurers to meet an 80% standard in individual/small-group markets and 85% in large group, calculated with statutory adjustments and multi-year averaging. Rebates operate at an insurer/state/market level, not as a refund of your company's unused claims budget. The standards do not promise a particular premium or profit margin.

Costs are also still rising quickly. Employers in Mercer's (now Marsh's) 2026 survey expect total health benefit cost per employee to rise 8.2% in 2027 after planned changes, and about 11% if they changed nothing. If your renewal is above that, read [why your renewal went up](https://www.getprescience.com/guides/why-did-our-health-insurance-renewal-go-up).

## Common budgeting mistakes

- **Budgeting on single rates only.** Your first employee with a spouse and two children can cost three times your average. Budget for the share of your team likely to add dependents in the next year.
- **Assuming a renewal.** Test multiple hypothetical increases and show the cash reserve required in each case. A market forecast is not the insurer's commitment.
- **Ignoring fees.** PEO and platform fees are often billed per employee per month on top of premiums.
- **Comparing premiums but not cost sharing.** A hypothetical $80 monthly employee-premium reduction saves $960 yearly. Compare that with the service costs and maximum exposure under each option; illness alone does not determine which total is lower.
- **Assuming every employee enrolls.** Some waive because they are on a spouse's plan or Medicare. Price the people who will actually enroll, and check carrier participation rules.

## How to pay less without a worse plan

At Prescience, we design and run your company's health plan, from setup and enrollment to claims, compliance and COBRA. What your team gets:

- **An effective $0 deductible,** so the plan helps from the first visit.
- **Simple copays** shown before a visit, capped by a low out-of-pocket maximum.
- **A broad national PPO network,** plus providers we contract with directly.
- **24/7 physician-led care navigation:** a care team that finds the right provider, books appointments and explains costs up front.

What your company gets: one monthly cost set in your quote, usually 10–20% below comparable fully insured coverage and fixed before the plan starts, with no admin fees. You keep your payroll provider, and the plan can start mid-year.

> **Prescience Diamond: A company health plan with an effective $0 deductible.** Against the $777 single and $2,249 family averages above, our quotes usually land 10–20% lower on comparable coverage. Get your number in about a minute.
> - **An effective $0 deductible** and simple copays shown before a visit
> - **A broad national PPO network,** plus providers we contract with directly
> - **24/7 physician-led care navigation** that books visits and explains costs
> - **Usually 10–20% below comparable fully insured coverage,** fixed in your quote, with no admin fees
> Best for teams of about 15 or more that want one great group plan. [Get a Diamond quote](https://www.getprescience.com/get-started?p=Employer&product=diamond)

## Check the model against the first invoice

I would keep a simple reconciliation with one row per enrollee: coverage tier, total premium, employer amount, employee amount and effective date. The employer and employee columns must sum to the premium for every row. Keep fees in a separate column so a fixed service charge is not confused with medical premium. Compare the insurer's enrollment confirmation with payroll before the first deduction.

If an employee adds dependents or leaves during the year, model the actual effective date and ask about prorating or credits under the policy. Do not multiply the final month's bill by twelve and label it actual annual spending. For planning, keep a stable-enrollment scenario alongside a hiring scenario. That distinction makes it easier to explain why total benefit spending increased even when the rate per enrolled person changed little.

## Frequently asked questions

**How much does health insurance cost per employee per month?**

About $777 a month for single coverage and $2,249 for family coverage on average in 2025, according to KFF. Employers paid about $657 and $1,679 of that.

**How much does a small business pay for employee health insurance?**

At firms with 10–199 workers, the average single premium was $9,211 a year and the family premium $26,054 in 2025. Employers paid about 84% of single coverage and 64% of family coverage on average. Location, ages, plan level and fees move your number a lot.

**Why is health insurance more expensive in San Francisco?**

Premiums depend on the particular area, insurer, network and benefits. Obtain current comparable quotes; this guide does not establish a San Francisco surcharge or use private quote information.

**Which states have the most expensive employer health insurance?**

A state ranking depends on the survey year and population. This guide uses verified national employer benchmarks and does not present an unverified state ranking as a quote for your business.

**Is family coverage really three times the price of single coverage?**

Roughly. KFF's 2025 averages were $9,325 single and $26,993 family, a ratio of about 2.9.

**Do older employees cost more to insure?**

Often in age-rated small-group coverage, within federal and state limits. Some states prohibit or restrict age variation. The federal default adult curve reaches a 3:1 ratio, but it is not used identically everywhere.

**How much will health insurance costs go up next year?**

Employers in Mercer's 2026 survey expect an average 8.2% rise in health benefit cost per employee for 2027, after planned changes. Your renewal can be higher or lower depending on your claims, carrier and group size.

**Is a high-deductible plan cheaper?**

It can have a lower premium, but compare actual quotes and employer HSA contributions. KFF's plan-type averages describe different groups, not a guaranteed saving from switching plans.

## Sources

- [KFF, 2025 Employer Health Benefits Survey](https://www.kff.org/health-costs/2025-employer-health-benefits-survey/)
- [CMS, Medical Loss Ratio](https://www.cms.gov/marketplace/private-health-insurance/medical-loss-ratio)
- [HealthCare.gov, How insurance companies set health premiums](https://www.healthcare.gov/how-plans-set-your-premiums/)
- [CMS, State specific age curve variations (federal default age curve)](https://www.cms.gov/files/document/statespecagecrv042517pdf)
- [Mercer (Marsh), Employers expect health benefit costs to jump 8.2% in 2027 (September 2026)](https://www.mercer.com/en-us/about/newsroom/employers-expect-health-benefit-costs-to-jump-in-2027/)
- [CMS, Market rating reforms](https://www.cms.gov/marketplace/private-health-insurance/market-rating-reforms)
- [IRS, Fringe benefits](https://www.irs.gov/publications/p15b)