How Much Does it Cost To Offer Employees Health Insurance?

As an employer, being able to provide health insurance to your employees can give your company a competitive edge, as it can enhance your employees’ overall satisfaction and productivity. Health insurance costs can fluctuate greatly; however, the average annual costs for employers are $6,227 for single coverage and $15,754 for family coverage.

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The Cost of Offering Employees Health Insurance

By offering health insurance to your employees, your company may be able to attract more employees, have happier employees overall, and save on taxes. After an employer decides that they want to offer health insurance to their employees, they will purchase a plan to cover all eligible employees and dependents. This is commonly known as a group health insurance plan.

The cost of providing health insurance to your employees depends on factors such as:

• Insurance carrier
• Type of plan (PPO or HMO)
• Location
• Features (deductibles, copays, out-of-pocket maximums)
• Demographics of your employees
• Network of providers in the plan
• Your contribution amount

In 2020, the average annual premiums for employer-sponsored coverage were $21,342 for family coverage and $7,470 for individual coverage. After taking into consideration the costs that workers pay, the average cost of group health insurance becomes about $15,754 for an employer to cover a family and $6,227 for an employer to cover one employee.