# How much do employers pay for employee health insurance?

Source: https://www.getprescience.com/guides/how-much-do-employers-pay-for-health-insurance
Author: Aditya Jain, MD, Cofounder and COO, Prescience
Published: 2026-10-12
Updated: 2026-10-12

On average, employers pay about 84% of the premium for single coverage and 74% for family coverage. That's $7,885 and $20,143 a year per enrolled employee in KFF's 2025 survey. Most startups we work with pay 100% for employees to compete for talent. Here's how to decide what to cover.

- **Employer share, single:** 84% ($7,885/year)
- **Employer share, family:** 74% ($20,143/year)
- **Common carrier minimum:** Often 50% of employee-only premium
- **ACA affordability (2026):** 9.96% of household income

## What employers pay on average

KFF's 2025 survey found covered workers contribute 16% of the premium for single coverage and 26% for family coverage. That leaves employers paying 84% and 74%, or about $7,885 and $20,143 a year.

## Are there minimums?

- **Carrier rules.** Small group carriers commonly require the employer to pay at least 50% of the employee-only premium, along with a minimum share of eligible employees enrolling. Rules vary by carrier and state.
- **ACA affordability.** Employers with 50 or more full-time equivalents must offer coverage where the employee's cost for self-only coverage is no more than 9.96% of household income in 2026, or risk penalties. Check yours with the [ACA affordability calculator](https://www.getprescience.com/tools/aca-affordability-calculator).
- **Under 50 employees.** No federal requirement to offer coverage at all.

## What startups usually do

Most venture-backed startups we talk to cover 100% of employee premiums and some or all of dependent premiums. The reason is hiring: candidates leaving large tech companies are used to paying little or nothing from their paycheck. When we design a plan, $0 employee premiums are usually the first line in the offer letter.

## How to set your contribution

1. Start from your hiring market: what do candidates' current employers pay?
2. Price employee-only coverage at 100%, then decide on dependents (50%, 75% or 100%).
3. Model total annual cost, including PEO or admin fees.
4. Compare plans on what employees experience, not just premium.

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.

## Frequently asked questions

**What percentage of health insurance do employers pay?**

On average, 84% for single coverage and 74% for family coverage in KFF's 2025 survey.

**Do employers have to pay 50% of health insurance?**

There's no federal 50% rule, but many small group carriers require the employer to pay at least half of the employee-only premium. Large employers must meet the ACA's affordability standard.

**Should a startup pay 100% of employee health insurance?**

Most competitive startups do for employees, and many cover dependents too. It's one of the clearest benefits candidates compare.

## Sources

- [KFF, 2025 Employer Health Benefits Survey](https://www.kff.org/health-costs/2025-employer-health-benefits-survey/)
- [IRS, Employer shared responsibility provisions](https://www.irs.gov/affordable-care-act/employers/employer-shared-responsibility-provisions)