Pre-Tax vs Post-Tax💰
🎯Understanding the Difference
Two Options
Employers can structure benefit deductions two ways: pre-tax or post-tax. Both have advantages, but they serve very different purposes especially when it comes to ACA Marketplace coverage and subsidy eligibility.
TMH Group Solution 🚀
TMH Group uses a post-tax framework that keeps compliance simple while helping workers including full-time, part-time, seasonal, variable-hour, and 1099 contractors access licensed professionals who can assist with potential federal subsidies that may reduce premiums depending on income and Marketplace rules. TMH Group does not determine subsidy eligibility or plan pricing. 💰
📊Compare the Approaches⚖️
Both have value, but serve different workforce needs
Pre-Tax Benefits
Pre-tax deductions lower taxable income and can create meaningful savings on payroll and income taxes. This structure is ideal for traditional, full-time W-2 workers enrolled in an employer-sponsored group plan.
📌 Pre-Tax Highlights
- 💰Reduces taxable income and payroll taxes - savings can reach up to 40% depending on income and tax bracket.
- 👔Works best for stable, full-time staff under a standard group health plan.
- 📋Adds significant employer responsibility for plan documents, testing, and reporting.
- ⚠️Often makes workers ineligible for ACA Marketplace subsidies.
Post-Tax Benefits
Post-tax deductions occur after taxes are withheld. While this doesn't reduce taxable income, it supports potential eligibility depending on income for ACA Marketplace subsidies that can offset most - and in many cases all - of their premium cost. ✨
✅ Post-Tax Highlights
- 💵Can help preserve potential access to ACA subsidies depending on income, household size, and Marketplace rules. TMH Group does not determine subsidy eligibility or plan pricing.
- 🎯Post tax employer paid access fee for workforce support. Avoids pre tax HRA or cafeteria plan administration. TMH Group does not reimburse premiums or medical expenses and does not administer insurance plans.
- ⚡Simple setup with fixed access fee and no premium reimbursement requirements.
- 🔄Flexible enough for full-time, part-time, seasonal, and 1099 workers.
🚀TMH Group: The Post-Tax Advantage⭐
Simplicity meets impact 💡
TMH Group combines the simplicity of an employer arranged workforce support program with the impact of a modern health coverage access strategy. It lets employers extend ACA Marketplace access support to their workforce with a fixed monthly access fee per eligible worker while maintaining compliance and flexibility. TMH Group does not sponsor or administer a group health plan. Employers should confirm legal, tax, and ERISA implications with their advisors.
💼Employer Advantages
- 1Generally does not require employers to sponsor a traditional group health plan or file Form 5500. Employers should confirm all requirements with their ERISA and tax advisors. 📋
- 2Optional taxable stipends per worker class, not tied to premiums. 💰
- 3Works with all worker types and business sizes. 👥
- 4May reduce the likelihood of disrupting subsidy eligibility depending on income, household size, and Marketplace rules. 🛡️
😊Worker Advantages
- 1Structured to help workers preserve potential ACA subsidy eligibility depending on income and Marketplace rules. 💵
- 2May significantly reduce premiums depending on income. 🎉
- 3Owns individual coverage and can keep it if employment changes. 🔒
- 4Enrollment and servicing are handled entirely by licensed professionals. TMH Group does not enroll workers in coverage or service insurance policies. 👨⚕️
📋Quick Comparison⚡
Side-by-side breakdown 🔍
| 📌Aspect | 💼Pre-Tax Model | 🛡️TMH Group Post-Tax |
|---|---|---|
| 💰Tax Savings | Up to ~40% reduction | No direct tax reduction |
| 💵ACA Subsidies | Usually lost or reduced | ✅ May remain available depending on income, household size, offer of other coverage, and Marketplace rules |
| 📋Compliance | ERISA, COBRA, testing | ✅ Designed to reduce employer administrative burden compared with sponsoring a group health plan. Employers remain responsible for their own compliance obligations. |
| 👥Best For | Full-time W-2 workers | ✅ All worker types |
| 💸Employer Cost | Required contributions + admin | ✅ Fixed monthly Workforce Support Access Fee for program access, not an insurance premium |
✨Learn More About TMH Group🎯
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