Employer health insurance cost calculator

Estimate your company's cost

The defaults are national averages from KFF's 2025 Employer Health Benefits Survey, so they describe a typical plan, not yours. Replace them with the monthly premiums on your renewal or quote and the share you actually pay. Count employees by the coverage tier they enrolled in, not by headcount: people who waive coverage cost nothing in premiums.

What employers pay on average

Founders ask me some version of "how much does it cost to give employees health insurance?" on almost every first call. The honest answer is that it depends on four things: how many people enroll, which tiers they pick, your premiums and the share you pay. Here are the national averages the calculator starts from.

Small firms tend to pay a similar premium for single coverage but often ask workers to pay more for family coverage, so their employer share for families is usually lower. Many startups pay 100% for employees and 50% or more for dependents, which puts them above the average on single coverage and close to it on family.

Worked example: a 12-person startup

What drives your number up or down

• Age and location. Small-group premiums are rated by each employee's age and your ZIP code. A team of 25-year-olds in Texas pays far less than a team of 50-year-olds in New York.
• Plan design. A PPO with a low deductible costs more than an HMO with a high one. Most companies offer one richer plan and one cheaper plan.
• Tier mix. One family enrollment costs about as much as three single ones.
• Your contribution policy. Paying a flat dollar amount instead of a percentage keeps your cost predictable when premiums rise.
• Funding model. Fully insured premiums include the carrier's margin and state premium taxes. Other models can remove some of that. Our guide to funding models explains the trade-offs.

How company size changes the picture

National averages hide a big difference between small and large companies. In KFF's survey, small firms (3 to 199 workers) and large firms pay similar total premiums for single coverage, but small firms are more likely to offer high-deductible plans and to ask workers to pay more toward family coverage. That's how small companies keep premiums in line with large ones: the cost moves to employees through deductibles and family contributions.

For a startup, the practical question is what share to pay. In the companies I talk to, three patterns cover almost everyone:

• 100% for employees, 0% to 50% for dependents. The most common choice among venture-backed startups. It makes the offer easy to explain ("your coverage is free") and keeps family costs manageable.
• A fixed dollar amount per tier. For example, $700 a month toward any employee and $1,400 toward any family. The company's cost doesn't move when premiums rise; employees absorb increases unless you raise the amounts.
• The KFF average split, about 84% and 74%. Common among established small businesses, and the default in this calculator.

To model a fixed-dollar contribution, divide your dollar amount by the premium and enter the result as a percentage. A $700 contribution toward a $777 single premium is about 90%.

Employer contributions are tax-deductible for the business and tax-free to employees, so a dollar of health benefit is worth more to an employee than a dollar of salary. That's one reason a richer health plan often beats an equivalent raise for retention. Our guide on what employers pay has more benchmarks.

Ways to lower the cost without cutting benefits

1. Get a quote outside your PEO or carrier Renewals are priced to stick. A competing quote is the fastest way to find out whether your rate is fair.
2. Set contributions in dollars A fixed employer amount per tier caps how much a renewal increase can cost the company.
3. Pay premiums pre-tax A Section 125 plan saves the company 7.65% payroll tax on every dollar employees contribute. Use the Section 125 calculator to size it.
4. Consider ICHRA for small or spread-out teams A fixed monthly allowance makes cost fully predictable. Check the minimum allowance with the ICHRA affordability calculator.

What employees see

The employer's number is only half of the story. When I review a company's benefits, I also look at what a typical employee pays out of their own paycheck, because that's what they compare when a recruiter calls. At the KFF averages, an employee on single coverage pays about $120 a month and one covering a family pays about $571 a month, before deductibles and copays.

Those amounts come out pre-tax for most people, so take-home pay drops by less. You can see the per-paycheck effect with the paycheck calculator. If you pay 100% of employee-only premiums, single employees pay nothing, which is a simple and visible perk in an offer letter.

• Deductibles move cost to employees too. KFF found the average single deductible for covered workers was over $1,800 in 2025, and higher at small firms. A low premium share with a high deductible can still feel expensive.
• Family coverage is where employees feel it. At a 74% employer share, an employee covering a family pays over $6,800 a year in premiums alone.
• Waivers save money but cost retention. If people waive because the plan is expensive, you save on premiums but risk losing them to a company with a better plan.

What the same team would pay with Prescience

The calculator's 10–20% line isn't hypothetical for us: it's the range our quotes usually land in against comparable fully insured coverage. You can see your real number in about a minute.