Salary is the number everyone quotes. Health insurance is the number that quietly reshapes the budget. For employers who offer coverage, it is one of the biggest costs of employing someone, and it does not show up on the offer letter.
The KFF Employer Health Benefits Survey, the standard annual benchmark, has put the average annual premium for employer-sponsored coverage in the ballpark of roughly $8,000 for single coverage and over $23,000 for family coverage in recent years. Employers typically pay the large majority of the premium, often around 80% for single and roughly 70% for family coverage, with the worker covering the rest.
Put together, an employer offering family coverage can be paying well over a thousand dollars a month toward a single employee's health premium, on top of wages. Even single coverage adds several hundred a month. Multiply across a team and health benefits become one of the largest fixed costs a business carries. Factor it into the full picture with the cost to hire calculator.
This is the point people miss when they budget for a new role at just the salary. Add the employer health premium, payroll taxes, and other benefits, and the real cost of an employee runs well above their pay. We break the rest of it down in the true cost of hiring beyond salary.
Businesses control health costs by choosing plan designs, shifting some premium to employees, offering high-deductible plans with HSAs, or using a benefits broker to shop the market. Each lever trades cost against how attractive the benefit is, which matters for hiring. There is no free version, only different balances.
Small businesses are not stuck choosing between a full group plan and nothing. The Small Business Health Options Program, and arrangements like an ICHRA or a QSEHRA, let a small employer contribute a set amount toward employees buying their own coverage, with predictable cost. These trade some of the simplicity of a group plan for budget control, which can make offering health benefits feasible for a smaller team.
Benchmarks like the KFF Employer Health Benefits Survey put average annual premiums around $8,000 for single coverage and over $23,000 for family coverage in recent years. Employers usually pay the large majority, often about 80% for single and 70% for family.
Typically the majority. Employers commonly cover around 80% of the premium for single coverage and roughly 70% for family coverage, with the employee paying the remainder through payroll deductions. The exact split is an employer policy choice.
Family coverage runs about three times single coverage, richer plans cost more than high-deductible ones, and smaller employers in higher-cost regions face higher rates. The premium, plus the employer's large share of it, makes health benefits a major fixed cost.
Very much so. Beyond salary, the employer's health premium, payroll taxes, and other benefits push the true cost of an employee well above their pay. Budgeting a new role at salary alone understates what it actually costs.
A reformed credit analyst, Jessica Martinez turns dense financial paperwork into something you can actually use. She believes a number without a source is just a rumor wearing a tie.