What percent of the insurance premiums is the employer required to pay for medical insurance?


Typically an employer pays 50% of an employee premium. They must do this to meet ACA requirements and claim a tax credit, but those who don't have to comply and aren't claiming a tax credit may offer different amounts or use a different type of health care arrangement.

You can learn more about requirements for small employers here.

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James on

The question is what amount is an employer “required” to pay.
Th8s does not answer the question.

ObamaCareFacts.com on

To clarify the answer: For the purposes of the ACA and the mandate the employer must cover at least 50% of the employee premium.

From the IRS website: “A qualifying arrangement is one where an eligible small employer pays premiums for each employee enrolled in health care coverage offered by the employer in an amount equal to a uniform percentage (not less than 50%) of the premium cost of the coverage. See the “How is the uniform percentage requirement satisfied?”


Jon on

This still does not answer the question. The link you provided demonstrates what a small employer must pay in order to obtain a tax credit. The question is really, “what is the minimum percentage amount an employer is required to pay, under the ACA, toward employee premiums, regardless of whether or not they wish to receive tax credits?” Can you answer that question, and do so for both large and small employers? Thank you.

ObamaCareFacts.com on

So this isn’t citing a law, but typically plans require that 50% of the premium is paid by the employer. This just happens to be the same as the max amount an employer can get in tax credits (sorry if that is confusing).

The way it is worded on the IRS, in retrospect, leads me to believe that some employers can get away with less and that this is generally discouraged. This has me curious and i’ll look for an actual rule on this.

Jon on

Thank you. Anything yet?

ObamaCareFacts.com on

No sorry, but I am feeling like it is a rule set by insurers and the ACA only kicks in to say what the rules are for those who want tax breaks.

So i’m gleaning that it is insurers who set a bottom line, which makes sense, and not a branch of Government. Perhaps some more clarification is buried in a past Federal Register. I’ll continue to look at ask around.

Megan Phillips on

What if the employer pays more than this amount for employees? The company pays 50% of family coverage.
Can the amount paid by employer vary across employees? As in the owners/officers are covered 50% of family, some managers are covered 50% of family, others are only 50% of employee premium.
This is a small business – 12 employees.

ObamaCareFacts.com on

Good questions. Here is a link that should give you insight: https://www.shrm.org/templatestools/hrqa/pages/offeringdifferentbenefitsfordifferentemployees.aspx

The general rule is that you can offer different benefits to different employees, but there is some fine print to think about.

Lynne Welch on

It’s too much. Health care costs for the small businesses are too much for most of us to maintain. Joe Flower has a book which is a great resource which all small biz owners should read, How To Get What You Pay For. His site is imaginewhatif.com. His ideas can work to help reduce these costs, they just don’t need to be as high as they are!

ObamaCareFacts.com on

Seems like a good resource.

Lance on

Yes, This is getting ridiculous. I have a small business of 60 employees. I was paying 50% of my employees premiums. But, since Obama mandated where all employees had to have insurance. I cut it back to 20%. I couldn’t afford to pay 50% of 60 employees insurance. Now my insurance is telling me, starting in 2017. I’m required to pay 50% of all employee premiums. I ran some numbers, this is going to cost me around $150,000 a year. This is why small business’s is going out of business. So in order for me to keep from having to pay 50% I’ve gotta get under 50 employees. So that means 11people is going to lose there job. This is what I don’t understand about the democrat party. They preach more jobs to come to the US. But, the policies they want. They truly don’t understand the repercussion on the business owner. Why be in business for yourself if you have to give it all away. It sure isn’t worth the headache.

Mike on


You have me confused, you said you were paying 50% of your 60 employees premiums. The insurance company said now you have to pay 50% of your employees premiums, which is what you were doing anyway right? So how is it costing you more money, even if it is 150 k a year that equates to a 1.25 more an hour per employee.

You know you hear complaining all the time about the ACA for Americans, but isn’t this the same policy Mitt Romney put in place when he was Governor Of Massachusetts? Isn’t he a Republican? A President who is a Democrat puts it in place for the rest of Americans and then the belly aching starts, (no I’m not a staunch republican or democrat, but I do know a good idea when I hear/see one, and yes I do work, it is full-time, and no I get no kind of government assistance, to answer any of those types of questions before they arise). ALL AMERICANS should have the same health care benefits that the President has, no less.


Karrie B. on

He cut back to only paying 20% — rather than 50%.

JustMe on

I am in process of trying to find out same question while waiting on our broker to return my call to figure the math in it. We do a percentage of our lowest paid employee. I love how the Obama care is avoiding your question lol.

Gloree on

I declined coverage with my employer because we had one choice healthcare coverage or retirement (simplified employee pension plan), 1) is says if it’s affordable it’s has to be 9.66% of your annual income. the health insurance is 20 + dollars over, and 2)my employer gave market place a letter stating that i declined free coverage. That it was 100% paid by the employer. not true. They took my pension plan away to pay this. So now I cannot even get the same coverage I have always received because of my employer appealing this. I went with my employer healthcare for 3 + years and they took my pension plan to pay for this for these years. If they was providing free healthcare for each employee, my main question is where has my pension plan funding went??

Erin on

If your employer lied about the coverage you were offered than my best advice is for you to contact your state’s Insurance Commissioner to file a complaint and ask for their assistance. You can also try getting advice from the Marketplace in your state, but people report varying degrees of helpfulness from Marketplaces ranging from “not helpful at all” to “quick and easy answers.” If you let them know that your employer was not honest about the cost of the plan offered to you and that you want to appeal the cost assistance eligibility decision, that may help. Unfortunately, when employers or insurers are not honest and acting in good faith, it makes the already pretty complicated process that much more complicated.

Kelly Gorny on

Hi, I am not sure if this is the place to ask but is there a legal amount of notice an employer has to let employees know they are not contributing as much to our insurance?On Jan 13, they told us that as of Jan 1st, they would no longer provide 75% of coverage and our premiums went up $200 out of paycheck, And wanted us to sign a waiver for it which I didn’t. Don’t they have to give us a notice?

Amy on

I have a business with around 200 employees – what % am I required to pay of the premium of the insured under ACA? I was told by my broker that I can not make the employee pay more than 9%

ObamaCareFacts.com on

That is roughly true. What you would generally do is provide an amount that makes sense as a safe harbor (an amount that would logically result in few to no employees having to pay more than ~9%, its a little more than that, for self-only coverage).

If you are dealing with over 200 employees, you would almost certainly benefit from talking to a broker. They should be able to help answer questions like this.

kellie tidwell on

Is this 50% of employees family coverage or just for employee ?

ObamaCareFacts.com on

Since the employer would essentially be providing a family plan, I believe it applies to family coverage. You can always call healthcare.gov and ask for direction since this is a rule for the SHOP marketplace and that is part of healthcare.gov.

Kevin King on

I understand the 9.5% but I don’t see any rule for employees who make twice as much as an entry level employee. Are the premium splits the same. All employees start at $13.00 per hour. They are all full time but we use a 32 hour multiplier so; $13.00 X 32 = $416.00 per week 09 9.5% premium = $39.52 per week……but what about the employee making $25.00 per hour. Is their premium $39.52 per week or 9.5% of their pay.

ObamaCareFacts.com on

So two things.

1. The 9.5% is subject to slight adjustments each year, so make sure you are using the current amount (could be slightly higher or lower).
2. It is 9.5% of employee-only coverage for the employee. Therefore if your lowest-wage workers and higher-wage workers all have the same premium, then by default if the lower-wage workers are not above the limit the higher-wage won’t be either. If the higher-wage worker premium is different, then do the calculation for them.

To be very clear, the 9.5% rule says “the premium can be no more than this amount or they can get marketplace coverage and then they are counted against you for the employer mandate and you could owe a fee.” It does not say “this is how much their premium should be.” Does that make sense? 🙂

Ana Chavoya on

I would like to know the percentage of cost that an employer is required to pay per employee. We have employees who live in CA, GA, SC and IN.

Thank you,
Ana C