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The Least and Most Expensive States for Group Health Insurance

Written by: PeopleKeep Team
February 8, 2017 at 12:00 PM

You probably already know that the cost of living varies greatly from region to The Least and Most Expensive States for Group Health Insuranceregion. Where you live dictates how much you pay for just about everything, from housing to the cost of dinner at your favorite restaurant.

But did you know that your zip code also plays a role in the cost of group health insurance? According to a recent survey conducted by United Benefit Advisors (UBA), geography was one of several factors that affect the cost of health insurance.

How the States Stack Up

According to the survey of 11,524 businesses nationwide, these are the top 5 least and most expensive states for group health insurance costs:

  • States with the least expensive group health insurance costs: Hawaii, Idaho, Utah, Arkansas, and Mississippi
  • States with the most expensive group health insurance costs: Alaska, Wyoming, New York, Vermont, and New Jersey

On average, the most expensive states for group health insurance are in the northeast, according to a fact sheet of the survey’s key findings.

Hawaii, which the survey identified as a “perennial low-cost leader,” saw a nearly 7 percent decrease in the cost of single coverage. On the other hand, New Mexico—which made the least expensive list in 2015—experienced a 22 percent jump in monthly premiums for single coverage and a 30 percent increase in costs for family premiums, causing it to drop off the lowest-cost list.

The chart below reveals how the states compare for both single and family monthly premiums in 2016.

The Least and Most Expensive States for Group Health Insurance

Source: United Benefit Advisors

Other Factors That Affect Health Insurance Costs

Before you pack up and move, keep in mind that where you hang your hat isn’t the only factor that determines health insurance costs. Industry and group size are also important cost drivers. According to the survey:

  • Employees in the retail and construction industries have the lowest health insurance costs, whereas government workers have the priciest plans.
  • Although small business group health insurance costs are lower than average on the whole, the cost of family plans among small businesses saw big rate increases in 2016, “making it harder for small businesses to be family-friendly employers.”

Alternatives to Group Health Insurance

With the cost of group health insurance climbing in many states, some businesses are turning to other options for their employees’ health insurance needs. One of these options is the qualified small employer health reimbursement arrangement (QSEHRA).

Created by federal law in 2016, the QSEHRA is an attractive health coverage option for businesses with fewer than 50 employees. With a QSEHRA, employees buy their own health insurance plan, and their company reimburses them for medical and related expenses with tax-free dollars up to a certain amount each month.


Small businesses located in regions where group health insurance is prohibitively expensive are finding it increasingly difficult to provide their employees with traditional health insurance. Fortunately, alternatives like the QSEHRA are available to companies that wish to provide comprehensive health benefits while managing their costs.

What questions do you have about group health insurance and the QSEHRA? Let us know in the comments below.

Topics: Group Health Insurance, Qualified Small Employer HRA, Healthcare Costs

Additional Resources

Trying to decide which HRA is best for you? Take our quiz to find out.
Get our guide on how to offer health benefits with a small budget.