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Tax Preference for Employer-Sponsored Insurance

Under the current tax code the amount employers spend on health insurance is tax deductible and not considered taxable compensations; similarly, employees’ contributions toward their premiums can be made with pre-tax dollars. Individuals purchasing insurance on their own do not benefit from the same preferential tax treatment.

Self-Insured Plan

Refers to a plan where the employer responsible for the costs of the enrollees' medical claims.