the contributions of the employer for the Health care plan is 100% or it is combination of both the employee and employer. what is the percentage? and the contributions of the employee is taxable or free.

  • I'm having trouble parsing and understanding your question. Could you edit your question and explain further exactly what you are asking? Sep 28 '16 at 17:46
  • will employer contribute 100% or the employee also contribute along with the empolyer? what is the % of the contributions of both employee and employer for the Health Care Plan.
    – user10415
    Sep 28 '16 at 18:02
  • "will" or "can/must"? Will seems up to the employer.
    – Joe
    Sep 28 '16 at 18:03
  • forgive for my bad english it is not "will"
    – user10415
    Sep 28 '16 at 18:05

Typically an employee will be required to contribute to some portion of the premium to be enrolled in an employer plan. 100% payment from the employer is becoming increasingly rare. In some segments of the insurance world, the carriers will impose a 50% requirement on the employer, meaning the employer must contribute at least 50% to the employee's premium amount.

The ACA sets out a penalty if an employee's contribution is not considered to be "affordable." For penalty avoidance purposes, "affordable" means 9.5% of the employee's earnings from that employer. So if you make $60,000 per year, that's $5,000 per month, your contribution can be no more than $475 per month or your employer could face a penalty.

Typically, employee benefits plans are run as an IRS Section 125 Cafeteria Plan which gives employees the ability to allow a pre-tax payroll deduction for their contribution to their benefits. Generally, employee contributions are tax-free.

  • what is employer penality?
    – user10415
    Sep 28 '16 at 18:20
  • The affordable care act outlines a penalty if an employer doesn't offer "affordable" "minimum-essential" coverage to all (95%) of it's "full-time" employees. The penalty is only imposed if the company has more than 50 full time employees. If no plan is offered the penalty is $2,160 per full time employee, if a plan is offered but is not affordable or not minimum-essential coverage, the penalty is $3,240 for every employee that receives a tax subsidiarity at an insurance exchange. The penalties are prorated by month.
    – quid
    Sep 28 '16 at 18:24

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.