When it comes to offering employee health insurance, there’s a common misconception that once a broker like us sets up your shiny new plan, the rest magically falls into place. We wish! The truth is, while we handle a lot (and we mean a lot) of the setup and ongoing support, the payroll deductions piece? That’s your arena, dear employer.

Let’s walk through how health insurance deductions actually work, who does what, and how to keep it all running smoothly (and legally!).

🚦What Are Health Insurance Deductions?

Health insurance deductions are the portion of the monthly premium that your employees pay, usually taken directly from their paychecks. These deductions are typically split across pay periods (bi-weekly, semi-monthly, etc.), making the cost easier to manage for everyone.

💸 The Billing Reality Check

Here’s the part that surprises some employers: health insurance premiums are due in full on the first of the month.

That means whether or not you’ve collected your employees’ share yet via payroll, the insurance carrier expects their money upfront. No IOUs accepted.

So what happens?

You, the employer, front the entire premium amount and are reimbursed through the deductions you withhold from your employees' paychecks. It's like you’re temporarily playing banker for the insurance company. Glamorous, we know.

🧾 Payroll Deductions: Who Handles What?

Now, let’s talk logistics.

• We (the broker): We set up the plan, enroll your employees, provide deduction amounts, and support you and your employees along the way.
• You (the employer): You are responsible for entering those deduction amounts into your payroll system (unless you’re paying extra for a direct integration).

Important note:

Some payroll companies do offer a direct feed from platforms like Ease or Employee Navigator, but this typically comes with an added fee. If you're not using one of these integrations, it's up to you or your payroll admin to enter and maintain deduction info. There are also payroll platforms like Rippling or Gusto and we can build your benefit plans in their portals for direct payroll deductions as well.

🧠 Employer Contributions: What's Standard?

On average, most employers contribute 75% to 100% of the employee's premium for a base plan. But this can vary:

• White-collar industries (tech, finance, etc.) often lean toward higher contributions.
• Blue-collar or hourly industries may offer minimum contributions of 50% or a flat $100/month.

Just a heads up—employers offering lower contributions often struggle to meet participation requirements set by insurance companies. (Yes, that’s a real thing. Carriers want a certain percentage of your team to enroll, or they may not approve the plan at all.)

🪄 Make It Easier On Yourself

If managing all this sounds like a full-time job... well, that’s why we’re here. We’ll keep your plan running smoothly, handle carrier communication, and make sure your employees feel supported.

But when it comes to payroll deductions, you’re the quarterback. We hand you the ball—you just need to run the play.

👏 Final Thoughts

Offering health insurance is one of the best ways to attract and retain talent. But it does come with responsibilities. Here's the short and sweet version:

• We set up the plan and give you the deduction amounts.
• You handle inputting those into your payroll system (unless you’ve opted for a paid integration).
• Insurance premiums are due in full on the 1st of the month.
• You’re reimbursed over time via payroll deductions.
• Keep an eye on contribution percentages so you don’t run into participation issues.

If you’re ever unsure, just reach out—we’re here to help you and your team stay healthy and happy.

Need help setting up payroll deductions or want to explore integration options? Let’s chat. It’s one of the many ways we make health insurance less of a headache. 🧠💡