How Much Does An Employee Health Insurance Cost?

Employee Health Insurance Cost

Understanding the costs associated with health insurance coverage is essential for managing your employee’s healthcare expenses. In this blog, we will explore the factors that can impact the cost of employee health insurance and the major expenses that are often covered under the plan. We will also provide tips on how to know about your health insurance costs and seek help to make informed decisions about your coverage. Read on to get an idea of the cost estimation of your employee health insurance. Let’s dive in!

What Is Employee Health Insurance?

What Is Employee Health Insurance?Employee health insurance refers to a type of insurance coverage provided by an employer to its employees to help cover the cost of medical care and related expenses. It typically includes benefits such as hospitalization, prescription medications, doctor visits, and preventive care. Employee health insurance is offered as part of an employer’s benefits package and can be an important component of an employee’s overall compensation. It helps employees manage their healthcare costs and promotes employee well-being by providing access to medical care.

Employee Health Insurance Cost Estimation

The employee health insurance cost can depend on the factors mentioned above. Employers typically pay a portion of the premium, with employees also contributing through payroll deductions. According to the Kaiser Family Foundation’s 2021 Employer Health Benefits Survey, the average annual premium for employer-sponsored family health coverage was $21,342, with employers contributing an average of $15,237 (71%) and employees contributing an average of $6,105 (29%).

On an average basis, this cost may range from 1$ per employee to $8 per employee for one month. However, these costs can vary significantly on factors like location, size, and regulations of the organizations. The cost of Group plans may also depend upon the number of employees in a group. It is best to check with your specific health insurance plan for accurate and up-to-date information.

Major Expenses In Employee Health Insurance

Employee health insurance typically covers a range of medical expenses, depending on the specific plan and coverage level. Some of the major expenses covered by employee health insurance may include:

  • Hospitalization: This includes expenses related to inpatient care, such as room and board, surgery, intensive care, and other medically necessary services received during a hospital stay.
  • Prescription medications: Health insurance plans may cover a portion or all of the cost of prescription medications that are prescribed by a healthcare provider to treat covered medical conditions.
  • Doctor visits: This includes expenses related to visits to primary care physicians, specialists, and other healthcare providers for consultations, examinations, and treatments.
  • Preventive care: Many health insurance plans cover preventive care services, such as vaccinations, screenings, and wellness visits, at no cost to the employee to encourage early detection and prevention of health issues.
  • Diagnostic tests: Health insurance plans may cover the cost of diagnostic tests, such as blood tests, X-rays, MRIs, and other medically necessary tests to diagnose and monitor medical conditions.
  • Mental health and substance abuse treatment: Health insurance plans may provide coverage for mental health services, including therapy, counseling, and substance abuse treatment.
  • Maternity care: Health insurance plans may cover expenses related to prenatal care, childbirth, and postnatal care for expectant mothers.
  • Rehabilitation services: This includes coverage for rehabilitation services, such as physical therapy, occupational therapy, and speech therapy, to help patients recover from injuries or surgeries.

It’s important to review the specific details of employee health insurance plan to understand the coverage and benefits provided, as coverage may vary depending on the plan and insurer.

Factors On Which The Cost Depends

The cost of employee health insurance can depend on several factors, including:

Plan type

Plan typeDifferent types of health insurance plans have different cost structures. For example,

  • Health Maintenance Organization (HMO) plans typically require employees to choose a primary care physician and obtain referrals for specialist visits, which can result in lower premiums but limited provider options.
  • Preferred Provider Organization (PPO) plans may offer more flexibility in choosing providers but can have higher premiums.
  • Point of Service (POS) plans may offer a combination of HMO and PPO features.
  • High Deductible Health Plans (HDHPs) with Health Savings Accounts (HSAs) may have lower premiums but higher deductibles, which require employees to pay more out-of-pocket before the insurance coverage kicks in.

Coverage level

The level of coverage offered by the health insurance plan can also impact the cost. Plans may offer coverage for an individual employee, employee plus spouse/partner, employee plus children, or family coverage. The more extensive the coverage, the higher the premium may be.

Employer contribution

Employers often contribute a portion of the premium cost for employee health insurance. The amount of employer contribution can vary, with some employers covering a higher percentage of the premium, which can lower the cost for employees. However, some employers may offer minimal or no contribution, which can result in higher premiums for employees.

Employee contributions

Employees may be required to contribute towards the cost of health insurance premiums through payroll deductions. The amount of employee contributions can vary. Some plans require employees to pay a higher percentage of the premium, resulting in higher costs for employees.

Employee demographics

The demographics of the employees, such as their age, gender, and overall health status, can affect the cost of health insurance. Some plans may have age-based premium rates, where older employees may pay higher premiums compared to younger employees. Similarly, some plans may have gender-based premium rates, where premiums may differ based on the gender of the employees. Employee wellness programs, such as tobacco cessation or weight management programs, may also impact premiums.

Plan features

Health insurance plans may offer additional features or add-ons that can affect the overall cost of coverage. For example, plans that include dental and vision coverage, prescription drug coverage, mental health coverage, or wellness programs may have higher premiums compared to basic health insurance plans.

Geographic location

Geographic locationThe cost of health insurance can vary depending on the geographic location of the employer and employees. Factors such as local healthcare provider costs, regional health insurance market dynamics, and state regulations can impact the cost of health insurance premiums. For example, health insurance premiums may be higher in areas with higher healthcare costs or greater competition among insurers.

Other expenses

The deductible, copay, and out-of-pocket expenses associated with the health insurance plan can impact the cost. Plans with lower deductibles and copays may have higher premiums, as the insurance plan is covering more of the costs upfront. On the other hand, plans with higher deductibles and copays may have lower premiums but may require employees to pay more out-of-pocket for healthcare services before the insurance coverage kicks in.


In conclusion, understanding the cost of employee health insurance is crucial for managing the healthcare expenses of your employees. There are various factors on which the cost depends that must be kept in mind. The major expenses that the plan will cover may involve hospitalization, maternity care, mental health services, and more, depending on the needs of the employees. Whatever the cost may be, it is never too late to decide on providing a health insurance plan to the employees for the betterment of their health as well as the company’s productivity.

Employee wellness programs are the key to improving employee motivation, productivity, and retention. At MantraCare, we have a team of health experts, counselors, and coaches who serve corporate employees with 10+ wellbeing programs including EAP, Employee Diabetes Reversal, Corporate MSK, Employee Fitness, Corporate Yoga, and Employee meditation.

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