Tools

Group health insurance cost and affordability calculator

Totals what a group health plan costs you and your employees, then tests employee-only affordability against the ACA safe harbors for 2026 or 2027.

Runs entirely in your browser: nothing you enter is sent or stored by this site. Results are estimates for planning, not a quote or advice.

The tool does two jobs. It totals the monthly and yearly cost of a group health plan for the business and for employees, and it tests whether the lowest-cost employee-only coverage is affordable under the three ACA safe harbors. The example premiums and contributions it opens with are not rates. Replace them with your quote.

How to use it

  1. Plan year. Plans beginning in 2026 or 2027. This sets the affordability percentage.
  2. Employer contribution. A percentage of each tier's premium, or a fixed dollar amount per tier. Switching converts your entries so the employer's cost stays the same.
  3. The four tiers. Employee only, employee + spouse, employee + child(ren) and family. For each, enter enrolled employees, the monthly premium and the employer's contribution. Premiums come from your carrier or broker quote or renewal; enrollment counts come from your last invoice or enrollment records. For employee only, use the lowest-cost plan you offer that provides minimum value.
  4. Safe harbor inputs. Where employees work (the 48 states and D.C., Alaska or Hawaii), which poverty guideline applies, and any of: the lowest hourly rate among full-time employees, the lowest monthly salary, or the lowest annual Form W-2 box 1 wages. Use payroll records. Blank boxes are skipped.

The math

For each tier, the employer pays the premium times the percentage (or the dollar amount, never more than the premium) and the employee pays the rest. Multiply by enrolled employees, add the tiers, and multiply by 12.

The employee-only contribution passes a safe harbor if it is no more than the plan year's percentage times a base, rounded down to the cent:

  • Poverty line: percentage × the one-person poverty guideline ÷ 12.
  • Rate of pay: percentage × lowest hourly rate × 130 hours.
  • Monthly salary: percentage × lowest monthly salary.
  • Form W-2: percentage × lowest W-2 wages ÷ 12.

Passing any one is enough. A hypothetical example with the opening numbers, plan year 2026 (9.96%): the employee-only premium is $650 and the employer pays 75%, so the employee pays $162.50 a month. The poverty-line limit is 9.96% × $15,650 ÷ 12 = $129.89, which fails. The rate-of-pay limit at $17 an hour is 9.96% × $17 × 130 = $220.11, which passes, so the plan is affordable. Across 15 enrolled employees the employer pays $9,300 a month ($111,600 a year), employees pay $6,700 a month and the total premium is $192,000 a year.

Assumptions and limits

  • The safe harbors matter to an applicable large employer, meaning 50 or more full-time employees counting equivalents. Check status with the ACA employer mandate (ALE) calculator.
  • Only the employee-only tier is tested. The tool takes your employee-only premium as the lowest-cost minimum value plan and does not verify minimum value.
  • A higher-paid employee has a higher limit, so entering the lowest pay figures is the strictest check.
  • The poverty-line option follows the rule that any guideline in effect within six months before the plan year begins may be used. For a plan year starting January 1, 2026, that is the 2025 guideline; for plans starting later in 2026 or in 2027 the tool offers the 2026 guideline.
  • Wellness incentives, opt-out payments and mid-year changes can change how the employee contribution is figured. The tool does not adjust for them, so ask your broker or benefits counsel.
  • Rates by age, area and plan design are your inputs. Nothing here is a quote.

Compare structures in group health insurance for small businesses: how it works and what it costs and fully insured vs self-funded health plans: which fits your business, see why costs climb in why group health renewals rise and how to negotiate them, and weigh an health reimbursement arrangement allowance with the QSEHRA and ICHRA allowance calculator.

Where the figures come from

  • Affordability percentage: 9.96% for plan years beginning in 2026 (IRS Rev. Proc. 2025-25) and 10.22% for 2027 (IRS Rev. Proc. 2026-26).
  • Poverty guidelines for one person: $15,650 for 2025 and $15,960 for 2026 in the 48 states and D.C. (Alaska $19,550 and $19,950; Hawaii $17,990 and $18,360), from HHS.
  • Safe harbor rules: 26 CFR 54.4980H-5(e)(2), including 130 hours a month for hourly employees.

Last reviewed October 10, 2026

Related guides

Group health insurance for small businesses: how it works and what it costs How small-group health coverage is sold, rated and administered: eligibility, contribution rules, enrollment, plan options and the ACA rules that shape it. The ACA employer mandate: who must offer coverage and the 2026 penalties Who is an applicable large employer, what coverage avoids the 4980H penalties, and the 2026 figures: 9.96% affordability, $3,340 and $5,010. Why group health renewals rise and how to negotiate them What drives group health renewal increases in 2026 and 2027, with named cost projections, and a step-by-step plan to challenge, shop and restructure a renewal. Fully insured vs self-funded health plans: which fits your business How fully insured and self-funded health plans differ in risk, cash flow, regulation and data, with an example and the questions to answer before switching. The SHOP Marketplace for small employers: how it works in 2026 What SHOP coverage is, who qualifies, why employers now enroll through brokers or insurers instead of HealthCare.gov, and how it ties to the 45R tax credit.

Terms used here

Applicable large employer (ALE) Under the ACA, an employer with an average of 50 or more full-time and full-time-equivalent employees in the prior year, subject to the employer mandate. Full-time equivalent (FTE) A way to convert part-time hours into the number of full-time workers they equal, used to decide whether the ACA employer mandate or a tax credit applies. Health reimbursement arrangement (HRA) An employer-funded plan that reimburses employees tax-free for medical expenses and, in some versions, individual health insurance premiums.

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