What percentage of payroll does the average employer pay for health insurance?

The percentage of payroll that an employer pays for health insurance can vary depending on the size of the company, the industry, and the type of health insurance plan offered. According to the Kaiser Family Foundation, the average employer contribution for health insurance was 15% of payroll in 2022, up from 14% in 2019. This means that for a company with 100 employees earning an average of $50,000 per year, the total cost of health insurance would be $750,000, with the employer paying $112,500.

There are several factors that can affect the cost of health insurance for employers, including:

* Number of employees: The more employees a company has, the higher the cost of health insurance is likely to be. This is because insurance companies charge higher rates for larger groups of employees, as they are considered to be a greater risk.

* Industry: Some industries have higher-than-average health insurance costs, such as healthcare, manufacturing, and construction. This is because these industries have more employees who are exposed to hazardous materials or who have physically demanding jobs, which can lead to higher rates of injuries and illnesses.

* Type of health insurance plan: The type of health insurance plan that a company offers can also affect the cost. For example, HMOs (health maintenance organizations) and PPOs (preferred provider organizations) are typically less expensive than POS (point-of-service) plans or HDHPs (high-deductible health plans).

* Geographic location: The cost of health insurance can also vary depending on geographic location. For example, states with higher rates of medical care, such as California, New York, and Massachusetts, also tend to have higher health insurance costs.

In addition to the employer contribution, employees may also be responsible for paying a portion of the cost of health insurance through premiums, copayments, and deductibles. The amount that employees pay can vary depending on the type of health insurance plan and the level of coverage that they choose.