By NextBestFitHousehold: Family of four, $60k, Marketplace plan
Earner works at a 15-person firm that doesn't offer insurance (payroll $600k); family buys a subsidized silver plan.
Result
+$2,239
How it's calculated
| # | Step | Arithmetic | Value |
|---|---|---|---|
| 1 | AGI today | $60,000 | |
| 2 | Employer premium (hidden compensation) | $0 | |
| 3 | Other premiums end Marketplace, Medigap, and Medicare Part B/D premiums. | $2,400 | |
| 4 | Covered out-of-pocket costs end Deductibles, copays, coinsurance, and uncovered dental, vision, and hearing. | $2,500 | |
| 5 | Slower wage growth from employer tax Employer owes $2,625 in new health payroll tax on this worker; over time that is passed into lower wage growth. | −$2,073 | |
| 6 | Income tax on newly taxable compensation Premiums were paid with pre-tax dollars; wages are taxed. Federal + state. | $290 | |
| 7 | Employee FICA on newly taxable compensation 7.65% Social Security and Medicare. The Social Security part also raises future benefits. | $159 | |
| 8 | Income-based health premium 4.0% of AGI above the $32,000 exemption for a household of 4. | −$1,037 | |
| 9 | Net change per year, long run | $2,239 | |
| 10 | Net change per year, Year 1 | $3,780 |
Trade-off: This family gains in the short run, but in the long run the employer's new tax slows their wage growth. That is the cost of covering workers whose employers paid nothing before.