Employer-sponsored health insurance costs $9,325 a year for single coverage and $26,993 for family coverage in 2025. Those are total premiums, meaning the combined amount paid by both the employer and the worker. Your share as an employee is typically a fraction of that total, but exactly how much depends on your employer’s size, your plan type, and whether you’re covering just yourself or your whole family.
What You Pay vs. What Your Employer Pays
Most employers cover the majority of the premium, with workers picking up the rest through paycheck deductions. For single coverage in 2024, the average worker contributed $1,368 per year (about $114 per month), while the employer covered the remaining $7,583. For family coverage, workers paid $6,296 annually (roughly $525 per month), with employers covering about $19,276.
That split works out to employees paying about 16% of the single-coverage premium and 26% of the family premium. These ratios have stayed relatively stable in recent years, though the dollar amounts keep climbing as total premiums rise. In 2025, worker contributions ticked up to $1,440 for single coverage and $6,850 for family coverage.
How Company Size Affects Your Costs
Total premiums at small firms (under 200 employees) are generally lower than at large firms, but that number is misleading. Small employers shift a bigger share of the cost to their workers. In 2023, the average family premium contribution was $7,529 at small firms compared to $6,796 at large firms. Small-firm employees contributed 35% of the family premium on average, while the employee share at large companies remained relatively flat and well below that.
This gap has widened over time. Every year since 2017, employees at small companies have spent more on their premium contributions for family coverage than employees at large companies. By 2023, small-firm employees in 31 states paid more toward family premiums than their large-firm counterparts, and in 27 states plus Washington, D.C., they paid more for single coverage too.
Small businesses also tend to offer less generous benefits. Higher employee turnover, more frequent changes in coverage, and greater exposure to medical underwriting all drive up administrative costs for small employers. Low-wage small firms are far less likely to offer coverage at all. Small firms with high average wages offer plans at roughly the same rate as larger companies, but when wages are low, coverage often disappears entirely.
Plan Type Makes a Difference
The type of plan your employer offers has a significant effect on both your premium and your out-of-pocket spending throughout the year. The most common options are HMOs, PPOs, and high-deductible health plans (HDHPs).
HMO plans generally carry the lowest monthly premiums because they coordinate care through a network and require referrals to see specialists. PPO plans give you more flexibility to see out-of-network providers but charge higher premiums for that freedom. HDHPs take a different approach: premiums are lower, but you pay more out of pocket before insurance kicks in. In 2024, the average employer contribution for workers in HDHPs paired with health reimbursement arrangements was $7,879 for single coverage and $20,990 for family coverage. For HDHPs paired with health savings accounts (HSAs), employer contributions were lower still, at $6,777 for single coverage and $17,804 for family coverage.
If your employer offers an HDHP with an HSA, the trade-off is straightforward: lower premiums in exchange for a higher deductible, but you (and often your employer) can contribute pre-tax dollars to an HSA to cover those costs.
Beyond the Premium: Deductibles and Out-of-Pocket Costs
Your premium is only part of the total cost of health coverage. Deductibles, copays, and coinsurance add substantially to what you spend in a given year. Workers at small businesses face higher deductibles on average than those at large firms, compounding the premium gap described above. This means a small-business employee might pay more per month in premiums and still owe more out of pocket before their insurance covers anything.
When evaluating your employer’s plan options during open enrollment, the premium alone can be misleading. A plan with a lower monthly cost but a $3,000 deductible could end up costing more over the year than a higher-premium plan with a $500 deductible, especially if you use healthcare regularly.
Costs Are Rising, and Faster for Some
Family premiums rose 6% from 2024 to 2025, an increase of about $1,408. That pace has been fairly consistent in recent years: family premiums climbed 7% from 2023 to 2024. For context, a decade ago, a 5-6% annual increase was considered steep. These numbers reflect employer-sponsored plans across firms of all sizes.
The outlook for smaller employers is more concerning. For 2026, insurers in the small group market are proposing a median premium increase of about 11%, with some states seeing proposed hikes of 12% or more. These are proposed rates that still go through regulatory review, but they signal that small-business employees in particular should expect continued cost growth.
Several factors are driving these increases. Rising prices for specialty medications, including the growing coverage of GLP-1 drugs for weight loss at large employers, are pushing premiums upward. Hospital consolidation, higher provider reimbursement rates, and increased utilization of healthcare services after the pandemic all contribute as well. For small firms specifically, the instability of their insurance pools and higher administrative overhead per employee make them especially vulnerable to year-over-year cost spikes.