The short answer is that employers, on average, cover about 84% of employee-only healthcare premiums and about 74% of family coverage premiums. Those figures shift with company size, industry, plan type, and location. In KFF's 2025 Employer Health Benefits Survey, the average annual premium for single coverage is $9,325, with workers contributing $1,440 (16%), while the average family premium is $26,993, with workers contributing $6,850 (26%). Employers cover the rest.
The premium split is only part of the picture. Workers pay deductibles, copays, and coinsurance out of pocket on top of their premium share, and those amounts are not captured in the percentages above. Employers fund other pieces separately: contributions to health savings accounts (HSAs) and health reimbursement arrangements (HRAs), wellness programs, and, in self-funded plans, the medical claims themselves. Company size, plan type, industry, and geography all move the employer's share up or down.
What Factors Influence the Employer Contribution Percentage?
1. Company Size
Larger firms tend to cover a bigger share of the premium than smaller ones. In the 2025 survey, workers at firms with 10 to 199 employees contribute an average of $8,889 for family coverage, compared with $6,227 at firms with 200 or more workers. The gap is widest at the top: 29% of covered workers at smaller firms are in a plan where the worker pays more than half of the family premium, versus 5% at larger firms. Large employers have more negotiating power with insurers and more room to absorb costs, while smaller firms pass more cost to employees.
2. Plan Type
Health maintenance organizations (HMOs), preferred provider organizations (PPOs), and high-deductible health plans (HDHPs) all have different cost-sharing structures. In 2025, 46% of covered workers were enrolled in a PPO, 33% in a high-deductible plan with a savings option (HDHP/SO), 12% in an HMO, and 9% in a POS plan. HDHPs carry lower premiums: $8,620 on average for single coverage versus the $9,325 overall average, and $25,379 for family coverage versus $26,993. The tradeoff is a higher deductible. The average deductible in an HSA-qualified plan reached $1,886 in 2025, and many employers soften that with a contribution to the worker's account.
3. Industry and Geography
Employers in high-wage industries such as tech, finance, and professional services tend to cover a larger share of premiums to compete for talent, while lower-margin industries pass more cost to workers. Premiums also vary by region, so the same percentage split produces very different dollar amounts depending on where a firm operates.
Beyond Premiums: What Other Costs Do Employers Cover?
Premiums are one piece. Employers also fund, directly or indirectly, a share of actual medical claims. In self-funded plans, common among large employers, the employer pays covered claims directly rather than buying insurance for them, and typically carries stop-loss coverage to cap its exposure to very large claims. Workers still pay deductibles, copays, and coinsurance toward those claims. In fully insured plans, the insurer sets premiums based on expected claims and the employer subsidizes them.
Additional employer-funded benefits include:
- Wellness programs: Employers commonly spend several hundred dollars per employee per year on incentives and program costs.
- Health Savings Accounts (HSA) or Health Reimbursement Arrangements (HRA): Employers that offer them often contribute to the account to offset a higher deductible.
- On-site clinics or telemedicine: Many large employers cover these services at no cost to workers.
- Accidents and critical illness insurance: Some employers pay the full premium for these voluntary benefits.
How Does This Compare to Other Countries?
The U.S. is unusual in tying coverage to the employer. Countries with universal systems fund coverage through payroll contributions instead of employer-sponsored premiums. In Germany, statutory health insurance is funded by a 14.6% payroll contribution split evenly, 7.3% from the employer and 7.3% from the worker, plus a supplementary contribution that is also divided between the two. In the Netherlands, the employer pays an income-dependent contribution of 6.57% of wages (2024 rate) under the Health Care Insurance Act while workers pay a separate flat premium to their insurer. The U.S. model concentrates more of the direct cost and more of the plan-design decisions with the employer.
The percentage matters less than the total bill
Focusing on the split can hide the larger lever. Roughly a quarter of U.S. healthcare spending, between $760 billion and $935 billion a year, is waste: overtreatment, pricing failures, administrative complexity, and failures of care delivery, per a 2019 analysis in JAMA. That waste sits inside the premiums employers subsidize and the claims self-funded employers pay. Reducing the underlying spend does more for a company than shifting a few points between the employer and workers. The practical levers are pharmacy transparency, which removes spread pricing and markups, and steering people into primary and preventive care so conditions are caught before they become expensive hospital events. An employer that lowers its total spend can hold the contribution percentage steady and still pay fewer dollars, which is the number that lands on the income statement.
Actionable Takeaways for Employers and Employees
If you're an employer reviewing your benefit strategy, consider the following:
- Benchmark your contributions against industry and size-specific averages. The KFF survey is a trusted resource.
- Evaluate total cost of care, not just premiums. Offering a slightly lower premium with high out-of-pocket costs may not be competitive.
- Consider HDHPs with HSA contributions as a way to control long-term premium growth while still supporting employees.
- Communicate the full value of benefits beyond premiums, including wellness, telemedicine, and mental health support.
For employees, understanding your employer's contribution percentage can help you evaluate plan choices. A plan with 80% employer-paid premiums might still leave you with high out-of-pocket costs if the deductible is high. Always consider the total premium, deductible, and out-of-pocket maximum together.