Can my employer legally contribute to my private health insurance plan premiums?

Asked on November 30, 2015 under Employment Labor Law, Illinois


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 5 years ago | Contributor

It's legal, but not as beneficial to you: employer contributions to your private health insurance are considered extra income or compensation, so you will be taxed on them, whereas you don't pay taxes on the employer's portion of payments for employer-provided health insurance. If the employer would contribute, say, $800 a month towards your private insurance, that will increase your taxable income by $9,600 for the year--i.e. you'll owe taxes on another $,9,600.

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