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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.

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  • I'm having trouble parsing and understanding your question. Could you edit your question and explain further exactly what you are asking?
    – Ben Miller
    Sep 28, 2016 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, 2016 at 18:02
  • "will" or "can/must"? Will seems up to the employer.
    – Joe
    Sep 28, 2016 at 18:03
  • forgive for my bad english it is not "will"
    – user10415
    Sep 28, 2016 at 18:05

1 Answer 1

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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.

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  • what is employer penality?
    – user10415
    Sep 28, 2016 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, 2016 at 18:24

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