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vgardner218
Level 1

Company Contribution to Healthcare Insurance Premiums

Our company runs a weekly payroll. The company pays a fixed weekly amount as a portion of the healthcare insurance premiums. For example the total weekly premium is $50 and the company covers $45 of that amount. Our payroll system appears to be set up to handle this in two different ways and i cannot see if there is a reason or difference. There have been two Payroll Items set up. a) Health Insurance EE (this is a straight deduction of the weekly insurance premium. Under the Tax Tracking type section it is shown as "Premium Only/125)". b) Health Insurance ER (this is the payroll item that was set up to show the Company Contribution to the premium. Under Tax Tracking type this is shown as "Health Coverage Cost". Let me explain the two methods: 1) Some employees have been set up with the payroll item "Health Insurance EE AND Health Insurance ER. For these employees on their check stub they see the amount of the Health Insurance premium being deducted from their pay and they also see the amount of the Company contribution 2) Some employees have been set up with the payroll item Health Insurance EE only For these employees on their check stub they are only seeing the amount of the weekly Health Insurance premium that is being deducted from their pay. Is there any reason for this being handled two different ways? Are there any tax implications between the two different methods?
3 Comments 3
BettyJaneB
QuickBooks Team

Company Contribution to Healthcare Insurance Premiums

I appreciate the detailed information you've given, @vgardner218.

 

You've got me here to share some insights about the Healthcare Insurance Premiums in QuickBooks Desktop.

 

The deductions that will show up on your employees pay stub will depend on the payroll item used on your employees paycheck. In this case, you'll need to have all your employees set up for both contributions since your business shoulders the premium amount ($45). 

 

You have to add the company contribution to your employees' profile, so it will appear on your pay stub moving forward. For those employees who don't have the company's deduction on their prior payroll, you can create a liability adjustment to correct those paychecks. 

 

If the company contributions are not recorded properly, the information that will reflect on your employees form will be incorrect. 

 

To give you more insights about the Health Insurance Premiums and its process, you may see these links below:

If you need further assistance with the process, you can always reach out to our Customer Care Team. They have the tools to check on your set up and get this matter taken care of.

 

Of course, I'm just a reply away should you need anything else. I'll be around to help you out. Have a great day!

vgardner218
Level 1

Company Contribution to Healthcare Insurance Premiums

I think i understand the mechanics of setting this up but now my questions relates to reporting requirements. Is the company required to report the employer contribution amount somewhere. I have read that the Affordable Care Act requires employers to report the cost of coverage under an employer-sponsored group health plan but I am not sure if this would apply to my company and if it does is this process the way we would be able to capture the amount paid for each individual.
ChristieAnn
QuickBooks Team

Company Contribution to Healthcare Insurance Premiums

Hi there, vgardner218.

 

 

Thank you for posting here in the QuickBooks Community.

 

To verify if the Affordable Care Act is applicable to your business, I suggest contacting your accountant or health care provider.

 

Once done, you can follow the steps provided by my colleague to create a liability adjustment.

 

Please know that you're always welcome to post if you have any other concerns. Wishing you and your business continued success.

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