Small Business Health Insurance Cost Calculator
About $750 a month for each employee on single coverage, and about $2,000 for a family. Those are the 2025 averages for firms with fewer than 50 employees in the federal government’s MEPS-IC survey: $9,034 a year for single coverage and $24,176 for family coverage. Small business health insurance cost then depends mostly on how many people you cover, which tier they choose and where you are.
Average employee health insurance cost per month
| Coverage tier | Per year | Per month |
|---|---|---|
| Employee only | $9,034 | $753 |
| Employee plus one | $17,678 | $1,473 |
| Family | $24,176 | $2,015 |
MEPS-IC also splits small firms by size, and the calculator uses that spread as its range. For single coverage it runs from $8,640 at firms with 25 to 99 workers to $9,390 at firms with fewer than 10.
KFF’s 2025 Employer Health Benefits Survey gives slightly higher figures for small firms, $9,211 for single and $26,054 for family coverage, but KFF defines a small firm as 10 to 199 workers, so the two surveys are measuring different groups.
Premiums are still rising. KFF found increases of 5% for single and 6% for family coverage from 2024 to 2025.
Small business health insurance cost by state
| State | Single | Family | Calculator factor |
|---|---|---|---|
| New York | $11,804 | $30,351 | 1.28 |
| New Jersey | $10,415 | $26,238 | 1.12 |
| Illinois | $9,865 | $27,996 | 1.12 |
| Georgia | $9,801 | $27,747 | 1.12 |
| Massachusetts | $9,965 | $27,129 | 1.11 |
| Florida | $9,742 | $24,957 | 1.06 |
| California | $9,149 | $23,389 | 0.99 |
| Pennsylvania | $8,554 | $24,389 | 0.98 |
| Washington | $9,146 | $22,978 | 0.98 |
| Arizona | $8,640 | $22,869 | 0.95 |
| Texas | $8,737 | $21,949 | 0.94 |
| North Carolina | $7,872 | $23,343 | 0.92 |
| Ohio | $8,379 | $20,726 | 0.89 |
| Colorado | $8,039 | $21,275 | 0.88 |
| Alabama | $7,854 | $19,467 | 0.84 |
| Arkansas | $7,691 | $17,908 | 0.80 |
| Mississippi | $7,477 | $18,158 | 0.79 |
Figures are 2025 MEPS-IC premiums for firms with fewer than 50 employees. Each factor is the average of the state’s single and family premiums compared with the national ones. We left out Alaska because its family figure looks out of line with its single figure.
Who pays: employer and employee shares
The premium is shared. At firms with fewer than 50 employees, MEPS-IC found workers paying 21.3% of single premiums ($1,924) and 32.1% of family premiums ($7,760), so the employer health insurance cost is roughly 79% of single and 68% of family coverage. KFF’s small-firm figure for family coverage is higher, at 36%.
The calculator shows the full premium by default. Switch to “Employer pays 50%” to see the minimum an employer must cover to qualify for the tax credit below.
Under ACA rules, insurers in the small group market can vary rates by age (up to 3 to 1 for adults), tobacco use (up to 1.5 to 1), family size and location, according to CMS, so the averages above can shift for a team that is much younger or older than typical.
Do you qualify for the small business health care tax credit?
The IRS credit covers up to 50% of the premiums you pay (35% for tax-exempt employers). To qualify, you need to:
- have fewer than 25 full-time equivalent employees (the credit shrinks above 10)
- pay average annual wages under $67,000 per FTE for 2025; for 2026 the limit is twice the $34,100 figure in Rev. Proc. 2025-32, or $68,200
- pay at least 50% of the premium for employee-only coverage
- buy the plan through the SHOP Marketplace
The credit lasts for two consecutive years. It is not in the calculator because the amount depends on your wages and headcount.
Group health insurance for small business, or an HRA instead
If a group plan costs too much, the alternative is reimbursing employees for individual coverage. A QSEHRA lets small employers reimburse up to $6,450 for self-only coverage and $13,100 for family coverage in 2026, according to Rev. Proc. 2025-32. An ICHRA is open to employers of any size and the employer sets the maximum, but the Department of Labor notes that employees must have individual coverage or Medicare, and you cannot offer the same class of employees both an ICHRA and a group plan.