What does a benefits package actually cost?
Most small employers find out one renewal at a time. This gives you a benchmark figure in about thirty seconds — what an employer your size typically pays, before a single quote is pulled.
Start with your headcount.
Adjust the contribution splits to match what you offer. Every figure updates as you move.
Employees covering a spouse, children or both. The rest take employee-only.
At least 50% is the usual carrier participation requirement, and the threshold for the small business tax credit.
Change the assumptions
| Employee-only medical, annual | |
| Family medical, annual | |
| Dental, per employee per month | |
| Vision, per employee per month | |
| Basic life and AD&D, PEPM | |
| Long-term disability, PEPM |
Medical defaults are the 2025 KFF averages for firms of 10 to 199 workers. The ancillary figures are planning placeholders, not quoted rates — replace them with your own renewal numbers for a sharper result.
Estimated Employer Cost
—
per year
A benchmark estimate built from published survey averages, not a quote. Your real number depends on your census, your industry, your claims history and which carrier you are with. Michigan small group carriers filed for an average increase of about 11 percent for 2026, so a renewal is where this gets decided.
What this number is, and what it is not.
It Is a Benchmark
The medical defaults are the 2025 KFF averages for firms of 10 to 199 workers, $9,211 a year for employee-only coverage and $26,054 for family. That is a national average across many industries and carriers. Treat it as a starting line for a conversation, not a budget.
It Is Not a Quote
Your real premium comes from your census, your location, your industry and, above a certain size, your own claims. Two employers with identical headcounts can be twenty percent apart. Nothing here replaces a rate from a carrier. The census is what a carrier actually prices.
It Ignores Your Renewal
Michigan small group carriers filed for an average increase of about 11 percent for 2026. A benchmark tells you whether you are in the right postcode. Your renewal letter tells you what you are actually paying. Use both, in that order.
Three things to check before you accept it.
Your Funding Model
Between 50 and 500 employees, how the plan is funded usually matters more than which carrier you pick. Level-funded, self-funded and group captive arrangements all return money to you in a good claims year. Fully insured does not. They also carry more risk in a bad one, which is the trade to price.
The Small Business Tax Credit
Under 25 full-time equivalents, average wages below the indexed threshold, contributing at least half of employee-only coverage and enrolled through a SHOP-certified plan, that is up to 50 percent of your premium back, for two consecutive years. The credit is claimed on IRS Form 8941. Try our free cost per employee calculator to run the numbers for your own group.
An HRA Instead
An ICHRA or QSEHRA replaces a group plan with a defined allowance, which caps your cost by design. Whether it is cheaper depends on your census. See the ICHRA and QSEHRA guide. It also moves plan choice to the individual market, so employees trade a group network for whatever is sold where they live.
General information for planning purposes, not legal, tax or actuarial advice.
What employers ask about the cost of employee benefits.
How much does it cost to provide employee benefits for a small business?
For a small business, the medical plan is the overwhelming share of it. The 2025 benchmark averages for firms of 10 to 199 workers were 9,211 dollars a year for employee-only coverage and 26,054 dollars for family, before you decide what proportion you cover. Add dental, vision and basic life and most small employers land somewhere around 800 to 950 dollars per employee per month once employee contributions are netted out. Your own number moves with your dependent mix, your contribution splits and your funding model.
How much do employee benefits cost per employee?
As a planning benchmark, an employer offering medical, dental, vision and basic life to a workforce of around 25 typically carries somewhere in the region of $800 to $950 per employee per month, once employee contributions are netted out. Medical is the overwhelming majority of it. The figure moves with your dependent mix, how much of the premium you cover, and whether your plan is fully insured or an alternative funding arrangement. Try our free benefits cost percent of payroll calculator to run the numbers for your own group.
What percentage of payroll do benefits usually represent?
For most small and mid-sized employers, health and welfare benefits land somewhere between 8 and 12 percent of payroll, with the proportion rising as average wages fall. A low-wage workforce feels the same premium far more heavily than a high-wage one, which is why the same plan can be affordable at one employer and unaffordable at another.
How much of the premium does an employer have to pay?
There is no legal minimum, but carriers typically require an employer to cover at least 50 percent of the employee-only premium for the group to be eligible at all. Fifty percent is also the threshold for the federal small business health care tax credit. In practice most employers contribute considerably more toward employee-only coverage than toward dependents.
Why is our renewal higher than this estimate?
Usually one of four reasons: your own claims experience has started to carry weight, your dependent enrollment is heavier than average, your industry is rated higher, or the plan design is richer than the benchmark. Michigan small group carriers also filed for an average increase of about 11 percent for 2026, so a renewal well above a national benchmark is common this year and worth testing against the market rather than accepting.
Bringing that cost down → · Alternative funding and stop-loss →
Send us your renewal.
We’ll tell you whether it looks competitive, where we see opportunity, and the five questions we’d put to your carrier. No cost, and no obligation to move anything.
The renewal letter
Your current plan summary
Contribution split by tier
Enrolled counts by tier
Four documents, two more if your group is 50 or more. Nothing else; every extra one is a reason to postpone.
An independent employee benefits consulting firm. We look at the entire benefits program — cost, plan performance, risk and administration.
Switch to CFH. Unhappy with your broker? Your employees won’t notice. You will. →