What is the Average Price of Health Insurance for a Small Business?
Published on January 05, 2018
Updated August 2, 2019
Purchasing a group plan for a small business may provide access to lower average prices for health insurance per individual. This means that your employees could have less costly monthly premiums if they are part of a group health insurance plan through your small business.
Figuring out the average cost of insurance and using eHealth.com to compare prices might help you find the health insurance plans that work best for you and your small business employees.
Average cost of insurance for a small business
According to a 2018 eHealth report, the average cost of a small business group insurance plan bought through eHealth was:
- $409 for the average monthly premium per person in 2018.
- $3,140 for the average individual deductible per person in 2018.
Keep in mind that average monthly insurance premium costs vary from state to state.
Sometime a higher premium actually saves money
Be careful basing what a “good” premium cost is off of average costs, since every small business is unique in nature, and your premium costs may be vastly different than another small businesses premium costs.
Some other factors that go into premium cost are the amount of people being covered under the group policy, and the type of health insurance those employees require. In general, high premiums might mean lower costs elsewhere, such as with copayments and out-of-pocket maximums. So in some cases, like when the people covered by the group policy go to the doctor a lot or have several prescriptions, a plan with a high premium might save money in the end, since office visits and copayments are probably lower.
Comparing group insurance to the average insurance cost for individuals
Coverage under a small group health insurance plan was less costly on average than an individual plan, according to a 2018 eHealth report:
- In 2018, the average premium per person under a small business health insurance plan was 7 percent lower than the average premium for an individual plan.
- The average individual deductible for small business plans was 31 percent ($1,438) lower than the average deductible for individual coverage in 2018.
This might be something to consider as a small business owner when deciding whether or not to insure your employees with a group health insurance plan. Purchasing a group plan can lessen the average cost of health insurance per individual, so your employees could be paying less for a monthly premium if they are part of a group plan with your small business.
Offering a group insurance policy to your employees not only saves them money on premium costs—it can help you too. By offering perks like health insurance, you are making yourself a more desirable employer to work for, and creating a positive work environment by giving your employees benefits that they would otherwise have to purchase themselves.
Source: eHealth 2018 Small Business Health Insurance Report
Choosing the right small business health insurance plan
Now that you know the average cost of insurance for a group, it doesn’t mean that’s how much your small business health insurance premium should be every month. Take the time to consider factors like:
- your location
- the health of your employees
- the number of employees you have
- dependents who may be covered under the plan
- your budget and other factors.
Depending on the circumstances, the cost of your monthly premium may be lower or higher than the average premium for most.
Take the time to compare prices and get quotes with the tools eHealth provides for small businesses. We aim to help small businesses find quality group health insurance plans that fit the needs of employees, and fit all budgets. Knowing what other small businesses owners are paying on their premiums is a good place to start, but eHealth can help you find group policies that are tailored to your health-care needs and your budget.
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.