If you run a small business, you’ve probably discovered this already: health insurance is one of the hardest benefits to budget for. New small business owners often assume that there must be a standard price list somewhere. Unfortunately, there isn’t. Small business health insurance cost varies quite a bit depending on your employees, your location, and the type of plan you choose.
Still, there are predictable ranges. Once you understand how pricing works, the numbers stop feeling random and start feeling manageable. Here at J.C. Lewis, we can help you find the right employee health insurance plan that also works with your budget. Let’s take a real-world look at what businesses with 2 to 50 employees are typically paying in 2026 and why so you have a better idea of where your costs may start.
Average Cost of Health Insurance for Small Business (2026)
For most companies, premiums are split between employer and employee. Employers usually cover 50–75% of the monthly premium, though that’s flexible.
In 2026, the average cost of health insurance for small business plans generally falls into these ranges:
- Individual employee: $520–$780 per month
- Employee + spouse: $1,100–$1,650 per month
- Family coverage: $1,450–$2,200 per month
That means the typical employer health insurance cost per employee lands around $300–$550 per employee per month (employer portion)
Your actual numbers depend heavily on age demographics, but those ranges are what we regularly see across multi-state groups, including businesses operating in Texas.
Group Health Insurance Cost by Company Size
Many owners ask a simple question: Does a larger team make insurance cheaper?
Yes, but only to a point. Because small group insurance spreads risk, the group health insurance cost stabilizes as more employees join the plan. Here’s what businesses commonly experience.
Health Insurance Cost for 10 Employees
A company with about 10 employees usually sees the highest volatility in small business health insurance rates. Typical monthly employers spend around $3,000–$5,500 total per month
Why is this higher? With a small group, one major medical condition can affect overall pricing at renewal.
Health Insurance Cost for 25 Employees
At around 25 employees, pricing becomes much more predictable. Insurers have enough participation to average out risk. The typical employer monthly cost is around $7,500–$12,500 per month.
This is where many companies notice they can finally offer competitive benefits and still control budget.
Health Insurance Cost for 50 Employees
When you approach 50 employees, small group health insurance premiums often improve slightly on a per-employee basis. Your typical monthly costs here will be around $14,000–$24,000 per month.
At this size, plan options widen. Deductible structures, networks, and contribution strategies can dramatically affect pricing.
Why Small Business Health Insurance Rates Vary So Much
This is the part most people never get explained clearly. Insurance carriers don’t price based on your revenue, your industry, or how profitable your company is. They set prices based on risk.
Here are the biggest factors affecting small business health insurance costs:
1. Employee Ages
This is the #1 driver of premiums. A team averaging age 26 will cost dramatically less than a team averaging age 52. Two companies with identical employee counts can differ by 40% or more because of this alone.
2. Location
Rates are regulated at the state level. A business operating in Texas will often see different pricing than one headquartered in the Midwest or Northeast, even with identical employees. Provider networks, hospital pricing, and state insurance rules all influence premiums.
3. Plan Type
You can dramatically adjust the group health insurance cost depending on:
Many employers don’t realize a smarter plan structure can reduce premiums without reducing employee coverage quality.
4. Participation
Most carriers require about 70% employee participation. If too many employees decline coverage, rates increase because the group looks like a higher risk.
A Common Misunderstanding About Cost
Many business owners assume they must pay most of the premium.
You don’t.
There’s flexibility in how you structure contributions. Some companies pay 50%, others 70%, and some use tiered contributions for families vs individuals. Adjusting the contribution strategy is often the easiest way to control the employer health insurance cost per employee while still offering strong benefits.
Why Businesses in Texas Are Paying More Attention to Benefits
Over the past few years, hiring has changed. Salary still matters, but benefits now strongly influence whether candidates accept an offer. We regularly see Texas employers lose good candidates not because pay was low but because benefits were unclear or nonexistent.
Offering coverage doesn’t just help employees. It reduces turnover, improves retention, and makes recruiting significantly easier.
Reach Out to J.C. Lewis Today to Learn More About Health Insurance
The biggest takeaway is this: there is no single number for small business health insurance cost. But there are predictable ranges, and most businesses are closer to affordability than they think once plans are structured properly.
If you’re unsure what your company should realistically be paying, that’s exactly what we help with. At J.C. Lewis, we walk business owners through real plan options, explain what affects pricing, and help you compare choices without pressure.
If you’d like a straightforward estimate for your team in Texas or another state you operate in, reach out to us. We’re happy to review your current benefits or build a plan from scratch so you know exactly what to expect before making a decision. Reach out today to start the discussion.
