Employers often ask what split to offer before they ask which plan to buy. The split decides how much the company spends and how much comes out of each paycheck.
This guide shows what employers pay on average, the minimums that apply, what each split costs and how a Section 125 plan changes the math on the employee share.
Key facts
- Covered workers paid about 16% of the premium for single coverage and about 26% for family coverage in 2025 (KFF Employer Health Benefits Survey, 2025). Employers covered the rest.
- The average annual premium in 2025 was $9,325 for single coverage and $26,993 for family coverage (KFF Employer Health Benefits Survey, 2025).
- Most carriers ask employers to pay at least 50% of the employee-only premium and expect about 70% of eligible employees to enroll. The exact rules vary by state and carrier (PeopleKeep, 2024).
- Large employers must offer affordable coverage. For 2026, that means the employee cost of the lowest-priced self-only plan cannot pass 9.96% of household income, and the limit is 10.22% for 2027 (IRS Rev. Proc. 2026-26).
- Employee premium contributions paid through a Section 125 plan are exempt from the 7.65% employer share of FICA tax (IRS Publication 15-B, 2026).
What does a 70/30 or 80/20 health plan mean?
A 70/30 or 80/20 health plan is a way to describe how the employer and the employee split the monthly premium. The first number is the employer share. The second number is the employee share.
So on an 80/20 plan, the employer pays 80 cents of each premium dollar and the employee pays 20 cents. The split is about who pays the premium. It does not describe how the plan pays claims.
That second point causes confusion. Some people search for "80/20" when they mean coinsurance, where the plan pays 80% of a bill and the member pays 20% after the deductible. This guide covers the premium split. Our guide to group health plans and group health insurance covers how plan design affects claims.
How much do employers usually pay toward health insurance?
Employers pay about 84% of the premium for single coverage and about 74% for family coverage on average. That comes from KFF, which found workers paid about 16% and 26% of the premium in 2025 (KFF Employer Health Benefits Survey, 2025).
In dollars, workers paid an average of $1,440 a year for single coverage and $6,850 a year for family coverage (KFF Employer Health Benefits Survey, 2025).
Smaller firms look different. At firms with 10 to 199 workers, 29% of covered workers with single coverage have an employer who pays the full premium (KFF Employer Health Benefits Survey, 2025). Many small employers pick a generous employee-only share because it is easy to explain and helps with hiring.
Is there a minimum an employer must pay?
No federal law tells employers with fewer than 50 full-time workers how much to pay. Employers with fewer than 50 full-time and full-time equivalent employees are not required to offer health insurance at all (HealthCare.gov, 2026).
The limits come from two other places.
Carrier rules. Most insurance carriers require the employer to cover at least 50% of the employee-only premium. They also expect a minimum share of eligible employees to enroll, often 70% (PeopleKeep, 2024). Spouse and child coverage is usually not part of the minimum. These rules vary by state and carrier, so ask your broker for the written rule on any quote.
The ACA employer mandate. Employers with 50 or more full-time and full-time equivalent employees must offer affordable coverage or risk a penalty. Coverage is affordable when the employee cost of the lowest-priced self-only plan stays under 9.96% of household income in 2026 and 10.22% in 2027 (IRS Rev. Proc. 2026-26). Employers can use IRS safe harbors, such as W-2 wages, to test this. Our ACA affordability guide shows the test step by step, and our ACA employer mandate guide explains who must follow it.
What does each employer split cost?
Each step up in the employer share raises company cost by the same percentage of the premium. The table below uses a hypothetical employee-only premium of $600 a month to show the pattern. It is an example, not a quote.
Here is how four common splits compare for one employee and for a team of 10.
| Split (employer/employee) | Employer pays per month | Employee pays per month | Employer cost, 10 employees per year |
|---|---|---|---|
| 50/50 | $300 | $300 | $36,000 |
| 70/30 | $420 | $180 | $50,400 |
| 80/20 | $480 | $120 | $57,600 |
| 100/0 | $600 | $0 | $72,000 |
Moving from 70/30 to 80/20 adds $60 a month per employee, which is $7,200 a year for 10 employees. That is a real budget line, so it helps to know what you get for it.
How does a Section 125 plan change the cost of the employee share?
A Section 125 plan lets employees pay their share of the premium before income tax and payroll tax. The employer then skips the 7.65% employer share of FICA tax, which is 6.2% for Social Security plus 1.45% for Medicare, on every pre-tax dollar (IRS Publication 15-B, 2026). FICA means the payroll taxes that fund Social Security and Medicare.
The employee share is where this shows up. A bigger employee share means more pre-tax dollars and more employer savings. Here are the savings for the average worker contribution found by KFF in 2025.
| Coverage | Average yearly worker contribution (KFF, 2025) | Per month | Employer FICA saved per month at 7.65% |
|---|---|---|---|
| Single | $1,440 | $120.00 | $9.18 |
| Family | $6,850 | $570.83 | $43.67 |
Premium contributions alone may not cover a plan fee at the single-coverage average. The break-even is about $457 a month in pre-tax contributions per employee, because $35 divided by 7.65% is about $457. Section 125 plans also cover other pre-tax benefits, so savings often come from more than the medical premium.
Summit Health Benefits charges $35 per enrolled employee per month, and that fee is paid from the FICA savings the plan creates. Summit puts the net employer savings at about $56 to $101 per enrolled employee per month. Your number depends on how much each employee puts in pre-tax, so a quick review of your payroll is the best way to see it. Our FICA savings guide shows the full math.
How do you pick the right split for your team?
Pick the split by working backward from your budget, your hiring goals and the carrier minimum. Follow these steps.
- Start with the floor. Get the carrier's written minimum employer share. If you have 50 or more full-time workers, test affordability too.
- Set a total budget. Decide the most you can spend per employee per month, then see which split fits.
- Split by tier. Many employers pay a higher share of the employee-only premium than of the family premium. That keeps the plan affordable for every worker and holds down cost.
- Check the employee view. Look at what the employee pays per paycheck. A $120 monthly share is about $55 per biweekly paycheck before tax savings.
- Compare it to the market. Ask a broker what similar employers in your area pay.
- Add the tax savings. Run the employee share through a Section 125 plan and count the employer FICA savings against the cost of the plan.
If your quotes feel out of reach, see our guide to group health insurance alternatives for options such as an ICHRA, where the employer sets a fixed monthly allowance instead of a premium split.
Who sets up the plan that lowers the employee share?
An employer sets up a Section 125 plan with a written plan document, and many employers hire an administrator for the paperwork and testing. The document is required, and a plan cannot favor highly compensated or key employees (IRS Publication 15-B, 2026).
Summit Health Benefits provides a written plan document and a summary plan description, supports nondiscrimination testing and has its plan documents reviewed by ERISA attorneys. Employers keep the final say on the contribution split and the plan design. See how to set up a Section 125 plan for the full process, or use the Section 125 savings calculator to estimate your numbers first.
Review Your Health Plan Split With a Benefits Expert
A Summit Health Benefits advisor compares your current employer share with other splits and shows the payroll tax savings a Section 125 plan adds on the employee share.
Frequently Asked Questions
What is a 70/30 health insurance plan?
What is the difference between a 70/30 and an 80/20 health plan?
How much should an employer pay for employee health insurance?
Does an employer have to pay a minimum share of health insurance premiums?
Can an employer pay more for the employee than for the family?
Is employee premium share pre-tax?
How does a Section 125 plan lower the cost of an employer health plan?
Sources: KFF, 2025 Employer Health Benefits Survey (2025); PeopleKeep, Minimum contribution requirements: group health insurance vs. HRAs (updated 2024); IRS Rev. Proc. 2026-26, 2027 ACA affordability percentage, as reported by EY Tax News (2026); HealthCare.gov, Health coverage for small businesses (2026); IRS Publication 15-B, Employer's Tax Guide to Fringe Benefits (2026); IRS Tax Topic 751, Social Security and Medicare Withholding Rates (2026).