By NextBestFitHousehold: Family of four, $100k, job-based coverage
Two parents (one earner at a large employer), two children, typical family plan.
Result
+$12,459
How it's calculated
| # | Step | Arithmetic | Value |
|---|---|---|---|
| 1 | AGI today | $100,000 | |
| 2 | Employer premium (hidden compensation) | $20,143 | |
| 3 | Worker premium contributions end Paycheck deductions for health insurance stop. | $6,850 | |
| 4 | Covered out-of-pocket costs end Deductibles, copays, coinsurance, and uncovered dental, vision, and hearing. | $3,000 | |
| 5 | Wage increase from employer savings Employer paid $20,143 in premiums and now owes $7,500 in health payroll tax on this worker; the difference, net of the employer's own 7.65% FICA, becomes wages. | $9,983 | |
| 6 | Income tax on newly taxable compensation Premiums were paid with pre-tax dollars; wages are taxed. Federal + state. | −$2,693 | |
| 7 | Employee FICA on newly taxable compensation 7.65% Social Security and Medicare. The Social Security part also raises future benefits. | −$1,288 | |
| 8 | Income-based health premium 4.0% of AGI above the $32,000 exemption for a household of 4. | −$3,393 | |
| 9 | Net change per year, long run | $12,459 | |
| 10 | Net change per year, Year 1 | $13,733 |
Trade-off: Premiums from KFF's 2025 Employer Health Benefits Survey: $26,993 total, worker share $6,850. Out-of-pocket is a typical figure for a family with a deductible plan; families with a serious illness hit the out-of-pocket maximum (up to $18,400 in 2025).