Set up health insurance deductions and contributions

You can set up paycheck deductions for employees to automatically pay into their health insurance plan. You can also set up company contributions for this benefit.

Need to set up company contributions to a Health Savings Account (HSA) instead? See Set up contributions to an HSA.

To set up company contributions to an employee's health insurance:

1. In the left navigation bar, click Employees.
2. Click the employee's name, and then click Edit employee.
3. Under Does this employee have any deductions?, click the pencil icon to edit a deduction, or click Add a new deduction to add one.
4. Select New deduction/contribution from the Deduction/contribution drop-down.
5. Select Health Insurance from the Deduction/Contribution type drop-down.
6. Select the Type from the drop-down:
   • Medical Insurance
   • Vision Insurance
   • Dental Insurance
7. Enter a description or the name of the provider for the health insurance.
8. Select  $ amount or % of gross pay for the Amount per pay period, and then enter the dollar amount or percent per paycheck for this employee. You can change the amount later when you create paychecks.
9. Optionally, you can enter the maximum amount per year that the employee can deduct or the company can contribute.

You are now ready to select how the premiums are taxed and save all your information:

To avoid penalties, choose a premium type based on your plan documents. If you're not sure, contact your plan administrator.

1. Select how the premiums are taxed:
• Taxable insurance premium — select this if the premiums should be taken out of your employee's net pay (after taxes). Taxable employee contributions are not reported on Form W-2.
• Pre-tax insurance premium — select this if the premiums should be taken out of your employee's gross pay (before taxes). On Form W-2, employee pretax contributions (plus company contributions, if there are any) are reported in Box 12 but excluded from federal wages and most state wages. If the employee's pretax contributions are taxable at the state or local level, we include the amount in taxable wages.
2. Click OK.

After you set up a deduction or contribution for one employee, you can assign it to other employees.

See also

• Set up employee deductions and company contributions
• Set up employee deductions for a Health Savings Account (HSA)
• Payroll topics

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