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Health insurance costs an employer about $7,885 a year per employee for single coverage, or roughly $657 a month. That is the employer’s share of the $9,325 average annual single premium reported in KFF’s 2025 Employer Health Benefits Survey, after the worker’s average $1,440 contribution. For family coverage, the employer’s share rises to about $20,143 a year per enrolled employee, or roughly $1,679 a month. The rest of this guide breaks the number down by plan type and firm size, and explains what the headline figure leaves out.
How much does health insurance cost an employer per employee?
For single coverage, the average employer pays $7,885 a year per enrolled employee, which is $657 a month. For family coverage, the average employer pays $20,143 a year, or $1,679 a month. These figures come from KFF’s 2025 survey of 1,862 employers: average annual premiums of $9,325 for single coverage and $26,993 for family coverage, with workers contributing 16% and 26% respectively. If you employ ten people on single coverage, budget about $78,850 a year in employer premium alone.
| Coverage | Total annual premium | Worker pays | Employer pays per year | Employer pays per month |
|---|---|---|---|---|
| Single | $9,325 | $1,440 | $7,885 | $657 |
| Family | $26,993 | $6,850 | $20,143 | $1,679 |
How does the cost change by plan type?
Plan type moves the employer share more than most owners expect. High-deductible plans with a savings option are the cheapest: their average single premium is $8,620 a year, which puts the employer share near $7,240 if the worker pays the average 16%. Preferred provider organization plans are the most expensive, with an average single premium of $9,818 a year. The gap between the cheapest and most expensive plan type is about $1,200 a year per single-covered employee, which is $12,000 a year for a ten-person firm. Before choosing on price alone, check what your workers actually use: a cheap premium paired with a high deductible can push workers toward delaying care, which shows up later as absenteeism and turnover. The tradeoff between plan tiers is laid out in gold vs silver health plans.
Do small firms pay more per employee than large firms?
For single coverage, barely. KFF puts the average single premium at $9,211 for firms with 10 to 199 workers and $9,361 for larger firms, a difference of $150 a year. Family coverage is where small firms pay less on premium but their workers pay more: the average family premium is $26,054 at small firms versus $27,280 at large firms, yet workers at small firms contribute an average of $8,889 toward family coverage compared with $6,227 at large firms. In other words, small firms shift a larger share of the family premium onto the worker. Twenty-nine percent of covered workers at small firms are in a plan where the employer pays the entire single premium, versus only 7% at large firms, so small-firm averages hide a wide spread. If you run a small firm, your own split matters more than the national average.
What does the per-employee figure leave out?
Three things. First, the KFF figure counts only enrolled employees. Workers who decline coverage, part-timers who are not eligible, and workers in a waiting period cost you nothing in premium, so your cost per employee on payroll is lower than your cost per enrolled employee. Second, the premium is not your whole benefits cost. Employer payroll taxes, retirement contributions, and any health savings account seed money sit outside the premium. Third, the average deductible for a covered worker in a plan with a general annual deductible is $1,886 for single coverage, and that cost falls mostly on the worker, not on you, but it shapes how your team experiences the plan you chose. For the family side of the same math, see how much employer family coverage really costs.
How is the employer share trending?
Single premiums rose 5% in 2025 and family premiums rose 6%, against wage growth of 4% and inflation of 2.7%. Over five years, family premiums are up 26%, roughly in line with wages and inflation over the same period. The practical point for budgeting: plan on a 5% to 6% annual increase, and revisit the worker contribution split each renewal rather than letting it drift. A firm that held its dollar contribution flat while premiums rose 5% a year has quietly shifted hundreds of dollars per worker per year onto its team, which is a retention decision whether or not it was intended as one.
What if you have only one employee, or yourself?
The same per-person math applies, but your buying options differ. A one-person firm generally cannot buy a group plan and instead shops the individual marketplace, where the average cost and the subsidy rules work differently. Our guides to marketplace health insurance cost by state and health insurance for part-time workers cover those routes. If you are approaching 65 and weighing employer coverage against Medicare, read working past 65 before you decide, since the coordination rules change the real cost.
How do you estimate your own cost?
Start from your headcount, not the national average. Count only the employees who will actually enroll, then split them into single and family coverage. A twelve-person firm with eight employees on single coverage and four on family coverage would budget roughly $63,080 a year for the single group (eight times $7,885) and $80,572 for the family group (four times $20,143), for a total near $143,650 in employer premium. Then adjust for your plan type: choosing a high-deductible plan over a PPO saves roughly $1,200 a year per single-covered employee, which is $9,600 across eight employees, but it also raises what those employees pay when they get care. Finally, check your eligibility rules. A 90-day waiting period for new hires lowers your first-year cost but delays coverage for the people you just hired, and part-time eligibility thresholds change the enrolled count directly. Run the estimate twice, once with your current enrollment and once with full enrollment, so a hiring wave does not surprise you at renewal.
Key takeaways
- The average employer pays $7,885 a year, or $657 a month, per employee on single coverage, and $20,143 a year, or $1,679 a month, per employee on family coverage, based on KFF’s 2025 survey.
- High-deductible plans are about $1,200 a year cheaper per single-covered employee than PPO plans.
- Small firms pay nearly the same single premium as large firms, but their workers contribute far more toward family coverage.
- Budget a 5% to 6% annual increase, and review your contribution split every renewal.
Frequently asked questions
How much does health insurance cost an employer per employee per month?
About $657 a month for single coverage and $1,679 a month for family coverage, based on KFF’s 2025 survey. Those are the employer’s shares after the worker’s average contributions of $1,440 a year for single coverage and $6,850 for family coverage.
What is the average employer health insurance premium in 2025?
The average total annual premium is $9,325 for single coverage and $26,993 for family coverage, according to KFF’s 2025 Employer Health Benefits Survey. The employer pays most of it: 84% of the single premium and 74% of the family premium on average.
Do employers pay the full premium for health insurance?
Usually not. On average, workers contribute 16% of the single premium and 26% of the family premium. Some employers, especially small firms, pay the entire single premium; KFF found 29% of covered workers at firms with 10 to 199 workers are in such a plan.
Is health insurance cheaper at small or large companies?
For single coverage, nearly the same: $9,211 a year at firms with 10 to 199 workers versus $9,361 at larger firms. For family coverage, small-firm premiums are lower but workers contribute more, $8,889 on average versus $6,227 at large firms.
How much has employer health insurance gone up?
Single premiums rose 5% in 2025 and family premiums rose 6%, according to KFF. Over five years, family premiums are up 26%, roughly matching wage growth and inflation over the same period.
