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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.

Administrative Services Only (ASO)

A type of insurance plan where the employer pays the actual costs of insurance claims while the insurance company is only responsible for administering the…