Average Cost of Employer-Sponsored Health Insurance

Small Business

Average Cost of Employer-Sponsored Health Insurance

Updated on November 29, 2019

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According to research published by the Kaiser Family Foundation in 2018, the average cost of employer-sponsored health insurance in terms of average annual premiums was $6,896 for single coverage and $19,616 for family coverage. The KFF report also found that the average annual deductible amount for single coverage was $1,573 for covered workers.

Overall, despite growth in premiums over time, the average cost of employer-sponsored health insurance has remained relatively stable in the health insurance market.

Source: Kaiser Family Foundation 2018 Employer Health Benefits Survey

How has the average cost of employer-sponsored health insurance changed?

Average employer-sponsored health insurance costs have increased modestly in recent periods. The KFF 2018 survey found that the average single premium increased by 3 percent and the average family premium increased by 5 percent over the previous year.

However, a long-term view of employer-sponsored health insurance costs reveals a larger change in the costs over time. According to the KFF report, the average premium for employer-sponsored family health coverage increased 20 percent from 2013 and 55 percent from 2008.

Source: Kaiser Family Foundation 2018 Employer Health Benefits Survey

Although average premium costs have risen to a degree over the past several years, employer-sponsored health insurance may often be a more affordable option than individual health insurance coverage.

Employer and employee contributions to monthly premiums

As a small business with less than 50 full-time equivalent employees, you are not required to offer group health insurance. If your company does decide to offer health coverage to your employees, then you are typically required to pay for at least 50 percent of employee premiums as an employer. Keep in mind that your business can also decide to contribute a larger amount to your workers’ premiums.

The KFF survey noted that the level of employer contributions to worker premiums tends to vary:

  • 27 percent of covered small firm employees had their employer pay the entire premium for their single coverage.
  • 34 percent of covered small firm employees were enrolled in a plan where they contribute more than one-half of the premium for family coverage.
  • In 2018, the average amount covered employees contributed was $1,186 for single coverage and $5,547 for family coverage, which was similar to the amounts workers paid the year before.

Source: Kaiser Family Foundation 2018 Employer Health Benefits Survey

How many small businesses offer employer-sponsored health insurance?

When considering the costs of health coverage for employees, small business owners may wonder how common it is to provide an employer-sponsored plan.

According to the KFF survey, 54 percent of small firms (with between 3 to 49 workers) offered health benefits in 2018. The percentage was slightly lower for smaller groups, with the survey noting that only 47 percent of firms with 3 to 9 workers offered health coverage to their employees.

Source: Kaiser Family Foundation 2018 Employer Health Benefits Survey

The fact that only about half of small businesses offer employer-sponsored health insurance could be advantageous for the companies that do choose to provide this popular employee benefit. Offering health insurance may be an excellent way to stand out from competing employers while contributing to a company’s recruiting strategy and employee benefits package.

Overall, the KFF survey concludes by observing the continued stability and relatively low growth in costs for employer-sponsored health coverage.

The importance of affordable employer-sponsored health insurance

Understanding the average cost of employer-sponsored health insurance can help small business owners explore coverage options for themselves, their families, and their employees.

According to an April 2019 eHealth survey of small business owners, the top two most important factors for small employers when choosing a group health plan are affordable monthly premiums and out-of-pocket costs.

Source: eHealth 2018 Small Business Health Insurance Report

Shopping for employer-sponsored health insurance

With eHealth, small business owners can easily shop for affordable employer-sponsored health insurance coverage. By quickly entering in your business’ zip code and number of employees on our small business health insurance page, you can immediately gain access to free, no-obligation group health insurance quotes.

Our marketplace offers the largest selection of health plans on the Web, which allows you to quickly compare different group plans offered by different insurance companies side by side.

Find out more about how eHealth can help you find the optimal health insurance for your small business by visiting eHealth.com or speaking with one of our licensed health insurance agents.

This article is for general information and may not be updated after publication. Consult your own tax, accounting, or legal advisor instead of relying on this article as tax, accounting, or legal advice.

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