How Much Does Small Business Health Insurance Cost?

If you’re an employer looking for small business health insurance, you know that finding the right coverage can be tricky. But what do you need to know about the costs? How much will you pay for premiums each month, and what are your other expenses likely to be? In this post, we’ll take a look at some of the factors that influence small business health insurance cost. We’ll also give you some tips on how to keep your premiums as low as possible. 

Healthcare can be costly and complicated, but offering your employees health insurance can reduce turnover, help you stay competitive as a business and lead to receiving tax credits.

According to the 2021 Kaiser Family Foundation Employer Health Benefits Survey, the average annual premium cost for a single employee was $7,813 and employers contributed 83% towards it. The average annual premiums for family coverage was $22,463.

Cost Factors

The type of plan you choose, your industry, employees’ ages, and location can contribute to your cost as well as premiums can be more costly in some areas than others. 

Small Business Health Plan Type 

PPOs are typically more expensive than HMOs, but they provide access to a larger network of doctors and medical providers. Because HMO plans have more restrictions, premiums and copays have lower prices while High Deductible Health Plans (HDHP) compensate for the high deductible with a lower monthly premium than other plan types. 

There are also POS, EPO, HRA & HSA plan types to consider. The best way to compare and contrast these options is by getting a customized quote for your business or speaking with a licensed agent.

Age of Employees

Age is a significant consideration when calculating group premiums. The average age of your employees can contribute to costs because health insurance companies understand that as people age, their healthcare costs naturally increase. 

21-year olds typically serve as the minimum age benchmark rate, with those younger than 21 enjoying lower rates and those over 21 paying up to three times more for coverage.


A 2022 U.S. Bureau of Labor Statistics study found that some industries like transportation, health care and utilities have higher average employer premiums. 

Tobacco Usage

Under the ACA, group health insurers are legally allowed to impose a tobacco surcharge; this results in smokers paying up to 50% more for their health insurance than non-smokers. This policy is designed to help incentivize individuals away from smoking and towards healthier lifestyles.


Location can be a key factor in determining health insurance premiums, particularly when healthcare costs vary between regions. Health insurers must carefully evaluate components such as provider price structures to ensure accurate pricing for each geographic area and leverage negotiations with hospitals and physicians accordingly.

How to Save Money on Your Small Business Health Insurance Costs

The federal Small Business Health Care Tax Credit is a great way to save money on your employees’ premiums, but it’s only available if you pay at least 50% of their premium cost. So use this as an estimate when figuring how much insurance will cost your company in light of other expenses like wages, bonuses, etc.

In order to qualify for the Small Business Health Care Tax Credit, your business must:

  • Have fewer than 25 full-time employees  
  • Have an average employee salary is $56,000 or less  
  • Offer coverage to all of your full-time staff members  
  • Pay at least 50% of employees’ premium costs 


By shopping around and taking the time to compare health insurance plans, you can ensure that your business is getting the best coverage at the most affordable price. makes it easy to get free quotes online and comparison shop on your own, or you can call one of our licensed insurance agents for a free consultation. They will analyze your group’s needs and find the best plan for your budget. 

Give us a call today at (877) 658-2374 or enter your zip code in the bar above to get started!

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