Founder Data ReportYour Health Plan Costs About What a Big Company’s Does. Your Employee Pays $2,662 More for It.
You can’t afford to risk your business without a Sidekick at your side.
KFF surveys employers every year on what health coverage actually costs. The 2025 results say something uncomfortable about small firms: the premium you buy is close to what a 500-person company buys, and almost the entire difference in the deal lands on the worker — in contributions and in deductible.
Quick answer: In 2025 the average annual family premium was $26,054 at firms with 10 to 199 workers and $27,280 at larger firms — about 4% apart. But the average worker contribution toward that family premium was $8,889 at the small firms against $6,227 at the large ones, a difference of $2,662 a year. The average single-coverage deductible was $2,631 at small firms versus $1,670 at large ones. Note the population: KFF’s 2025 sample covered only firms with ten or more workers, and its “small firm” means 10 to 199.
- Family premium: $26,054 at firms with 10–199 workers, $27,280 at 200+. Nearly the same product.
- Worker’s share of that family premium: $8,889 at small firms, $6,227 at large. That $2,662 gap is the story.
- As a rate, small-firm workers carry 36% of the family premium; large-firm workers carry 23%.
- Average single deductible: $2,631 at small firms, $1,670 at large firms.
- 53% of covered workers at small firms face a single deductible of $2,000 or more, against 28% at large firms.
- 61% of firms with 10+ workers offer coverage at all — 97% of firms with 200+, but 59% below that.
You are buying nearly the same plan
Start with the part that should be reassuring. Small employers do not get catastrophically worse pricing on the premium itself. In KFF’s 2025 survey the average annual premium for family coverage was $26,054 at firms with 10 to 199 workers and $27,280 at firms with 200 or more. For single coverage the two are within $150 of each other — $9,211 against $9,361. Nationally the averages were $9,325 single and $26,993 family.
If the story ended there, the headline would be that scale buys you surprisingly little in health insurance, and a founder could reasonably conclude they are competitive on benefits. A great many founders do conclude exactly that, because the premium is the number sitting on the invoice they sign every month. It is the number they know.
The premium is not the benefit, though. The benefit is what the employee ends up holding, and that is a different number entirely.
Source: KFF, “2025 Employer Health Benefits Survey — Summary of Findings.” A survey of 1,862 randomly selected non-federal public and private employers with ten or more workers, fielded by Davis Research between January and July 2025; overall response rate 13%. In KFF’s tables “small firms” means 10 to 199 workers. The 2025 survey sample was limited to firms with ten or more employees, so these figures do not describe firms below that size. Premiums and contributions are annual averages for covered workers.
The difference lands on the employee
A worker taking family coverage at a firm with 10 to 199 employees contributed an average of $8,889 in 2025. A worker at a firm with 200 or more contributed $6,227. That is $2,662 a year out of one household’s take-home pay, for a plan whose sticker price differs by about $1,200 in the other direction. As a share, small-firm workers carry 36% of the family premium; at large firms it is 23%. For single coverage the rates are identical at 16%, which tells you precisely where the divergence lives: family coverage.
The distribution is harsher than the average. Twenty-nine percent of covered workers at firms with 10 to 199 employees are in a plan where they must contribute more than half of the family premium, against 5% at larger firms. Eleven percent of all covered workers — but 28% of those at small firms — are in a plan with a worker contribution of $12,000 or more for family coverage. Twelve thousand dollars, after tax, before anyone has been to a doctor.
There is a genuinely good number in the same data, and it deserves saying: 29% of covered workers at small firms are in a plan where the employer pays the entire single-coverage premium, against just 7% at large firms. Small employers are more likely to cover an individual employee completely. They are far less likely to be able to cover that employee’s family. That is the shape of the whole finding.
The averages move the same way: the average single-coverage deductible was $2,631 at firms with 10 to 199 workers against $1,670 at firms with 200 or more. Nationally the average was $1,886, and 88% of workers with single coverage have a general annual deductible at all.
Source: KFF, “2025 Employer Health Benefits Survey — Summary of Findings.” A survey of 1,862 randomly selected non-federal public and private employers with ten or more workers, fielded by Davis Research between January and July 2025; overall response rate 13%. In KFF’s tables “small firms” means 10 to 199 workers. The 2025 survey sample was limited to firms with ten or more employees, so these figures do not describe firms below that size. Figures are the share of covered workers in a plan with a general annual deductible of $2,000 or more for single coverage.
Source: KFF, “2025 Employer Health Benefits Survey — Summary of Findings.” A survey of 1,862 randomly selected non-federal public and private employers with ten or more workers, fielded by Davis Research between January and July 2025; overall response rate 13%. In KFF’s tables “small firms” means 10 to 199 workers. The 2025 survey sample was limited to firms with ten or more employees, so these figures do not describe firms below that size. The $2,662 and $961 gaps are arithmetic on KFF’s published contribution and deductible figures; KFF does not publish those differences as such.
Small employers are more likely to cover an individual employee completely, and far less likely to be able to cover that employee’s family.
And four in ten small firms are not in this conversation at all
Everything above describes firms that offer coverage. Many do not. Sixty-one percent of firms with ten or more workers offered health benefits to at least some workers in 2025. Among firms with 200 or more employees the rate is 97%. Below that line it is 59%.
Read those two numbers next to each other and the recruiting problem states itself. If you are a 15-person firm competing for someone who is also interviewing at a 400-person firm, there is a 97% chance the larger employer offers coverage and a roughly even chance among your own size class that the candidate’s other small-firm option does not. Benefits are not a differentiator against the big employer. They are a differentiator against the other small one — and only if you are on the right side of 59%.
It is worth being exact about who this data covers, because it is easy to over-read. KFF limited the 2025 sample to firms with ten or more employees, a change from prior years that the Fund notes raised the measured offer rate relative to earlier published estimates. If you run a business with four people, none of these figures describe you directly. What they do tell you is what the firm one size up from you is dealing with, which is usually where your next hire is coming from or going to.
Source: KFF, “2025 Employer Health Benefits Survey — Summary of Findings.” A survey of 1,862 randomly selected non-federal public and private employers with ten or more workers, fielded by Davis Research between January and July 2025; overall response rate 13%. In KFF’s tables “small firms” means 10 to 199 workers. The 2025 survey sample was limited to firms with ten or more employees, so these figures do not describe firms below that size. Offer rates are shares of firms; contribution and deductible figures are for covered workers.
What to actually do with this
The instinct when a founder sees these numbers is to feel caught out, and that is not useful. The premium gap is small precisely because there is not much you can negotiate away at your size. What is inside your control is the split — how much of the family premium the business absorbs versus how much the household does — and whether you have ever said the real numbers out loud to the people working for you.
Most small employers have not. The plan gets chosen once, in a hurry, usually in the first year there was anyone to cover, and then renews. Nobody revisits the contribution split because revisiting it means opening a conversation about money with people you see every day, and that is exactly the kind of conversation a founder running alone puts off indefinitely. Meanwhile the employee with two children is quietly carrying $8,889 and a $2,631 deductible and has drawn their own conclusions about how they are valued.
You do not have to fix the split this year. You do have to know what it is, and say it. A founder who can tell an employee exactly what the business pays, exactly what the employee pays and why it is set where it is has converted an invisible grievance into a shared constraint. That is a different company to work at, and it costs nothing but the conversation — which is the one thing most people building alone never get around to having.
Frequently Asked Questions
How much does health insurance cost a small business per employee?
In KFF's 2025 Employer Health Benefits Survey, the average annual premium at firms with 10 to 199 workers was $9,211 for single coverage and $26,054 for family coverage. Nationally the averages were $9,325 and $26,993. The employer pays part of that and the worker contributes the rest. The survey covered only firms with ten or more workers.
Do employees at small companies pay more for health insurance?
For family coverage, substantially more. Workers at firms with 10 to 199 employees contributed an average of $8,889 toward the family premium in 2025, against $6,227 at firms with 200 or more — a difference of $2,662 a year. As a share of premium that is 36% versus 23%. For single coverage the contribution rate is the same at both sizes, 16%.
Are deductibles higher at small companies?
Yes. The average general annual deductible for single coverage was $2,631 at firms with 10 to 199 workers, against $1,670 at firms with 200 or more; the national average was $1,886. Over half — 53% — of covered workers at small firms are in a plan with a single-coverage deductible of $2,000 or more, compared with 28% at large firms.
What percentage of small businesses offer health insurance?
Sixty-one percent of firms with ten or more workers offered health benefits to at least some of their workers in 2025. Among firms with 200 or more workers the rate was 97%; among firms below 200 workers it was 59%. KFF limited its 2025 sample to firms with ten or more employees, so the survey does not measure offer rates below that size.
Is it cheaper for a small employer to cover a single employee than a family?
It is far more common. Twenty-nine percent of covered workers at firms with 10 to 199 employees are in a plan where the employer pays the entire single-coverage premium, against 7% at larger firms. But 29% of small-firm covered workers must contribute more than half the family premium, against 5% at large firms. Small employers more often cover the individual completely and less often cover the family.
Published by The Lonely Entrepreneur — the community and coaching platform for entrepreneurs who are building alone. lonelyentrepreneur.com
This article is for educational purposes and is not a substitute for professional financial or legal advice.