I just started a new job and after three months, got health insurance. Right after that, my paycheck went down. Can they reduce my pay because I’m on the health plan? No one told me this when I signed up.
Take-Home Pay Disappointment
Dear Take-Home Pay Disappointment,
Yes, the employer can take money from your paycheck to pay for your share of the health insurance cost. You should have been told how much your share is. Maybe in the hubbub of all the new employee paperwork, you or they overlooked it. The vast majority of employers have what is called a “Section 125″ or “cafeteria” plan, which allows them to take this money before taxes are charged. So, even though your share may be $50, your take-home pay may go down only $42.
Under health reform, your share of the cost cannot be more than 9.5% of your income if you earn less than 400% of Federal Poverty Limits. If it is higher than that, you can get a premium tax credit and buy coverage (presumably cheaper) on the insurance exchange. This will be available to you on January 1, 2014 and enrollment info is supposed to come out this October.