Ballpark salary equivalent today of “healthcare benefits” in the US?
"As a contractor, I have done this exact calculation many times so I can compare full time employment offers when they come. The answer varies greatly depending on your situation, but here's how to calculate it: So, subtracting the two and you get I've run many different scenarios with multiple plans and employers, and in my situation with a spouse and 1 child, the employer plans usually ended up saving me approximately $5k per year. So then, to answer your question: ...salary is ""100k"", ""with healthcare"", or then ""X"" ""with no healthcare"" - what do we reckon? I reckon I would want to be paid $5K more, or $105K. This is purely hypothetical though and assumes there are no other differences except for with or without health insurance. In reality, contractor vs employee will have quite a few other differences. But in general, the calculation varies by company and the more generous the employer's health benefits, the more you need to be compensated to make up for not having it. Note: the above numbers are very rough, and there are many other factors that come into play, some of which are: As a side note, many years ago, during salary talks with a company, I was able to negotiate $2K in additional yearly salary by agreeing not to take the health insurance since I had better insurance through my spouse. Health insurance in the US was much cheaper back then so I think closer to $5K today would be about right and is consistent with my above ballpark calculation. I always wondered what would have happened if I turned around and enrolled the following year. I suspect had I done that they could not have legally lowered my salary due to my breaking my promise, but I wouldn't be surprised if I didn't get a raise that year either." As others have said, it depends entirely on what benefits are provided, and how much of the cost of those benefits is paid by the employer and how much is paid by the employee, and compare that to what it would cost to obtain the necessary/equivalent coverage without employer assistance. In my case, my employer pays more than $10,000 per year toward the cost of medical, dental, vision, disability, and life insurance for myself and my family. That's almost 20% of the average total household income in my state, so it is not an insignificant amount at all. "While the other answers try to quantify the value of health care the question you ask is about employee vs contractor. The delta between those regarding benefits goes way beyond health care. In fact because almost every full time employee must have health care offered by their employer the option of  ""you can have X with healthcare, or Y with no healthcare"" is no longer an option. I have seen situations in the last few years where employees who had no need for healthcare coverage (retired military) were offered additional vacation days to compensate for their lower cost to the employer. For employee vs contractor what is different isn't just healthcare. It also includes holidays, vacation days, sick days, employer portion of social security, education benefits, and 401k. Insurance benefits include not just healthcare but also dental, vision, short term and long term disability, and life insurance. The rule of thumb to cover all these benefits that are lost when you are a contractor is an amount equal to your income. Of course some of these benefits  depend on single vs married and kids or not. But unless the rate they are paying the contractors is approaching twice the rate they are paying employees the contractor will be hard pressed to cover the missing benefits." "Equation: (M x 12) + MOOP = Worst case scenario cost Where M equals the monthly cost and MOOP is the maximum out of pocket amount.  So, if a plan costs $500 a month and the maximum out of pocket amount is $12,000 - which in a worst case scenario you would pay (it's almost always over the deductible) ... ($500 x 12) + 12,000 = $18,000 Most people look at the deductible, but be aware this is incorrect in a worst case.  The last one (maximum out of pocket) really hurts most people because they overlook it: Deductible vs. out-of-pocket maximum The difference between your deductible and an out-of-pocket maximum is   subtle but important. The out-of-pocket maximum is typically higher   than your deductible to account for things like co-pays and   co-insurance. For example, if you hit your deductible of $2,500 but   continue to go for office visits with a $25 co-pay, you’ll still have   to pay that co-pay until you’ve spent your out-of-pocket maximum, at   which time your insurance would take over and cover everything. New in   2016: embedded out-of-pocket maximums One change in 2016 is that, even   with an aggregate deductible, one person cannot pay more than the   individual out-of-pocket maximum within a family plan, even if the   aggregate deductible is more than the individual out-of-pocket   maximum, which is $6,850 for 2016. For instance, even if the overall   aggregate deductible was $10,000, a single person in that family plan   could not incur more than $6,850 in out-of-pocket expenses. (In 2017,   the out-of-pocket maximum will increase to $7,150.) After they hit   that number, insurance covers everything for that person, even as the   rest of the family is still subject to the deductible. From your question: Thanks - not sure I totally follow you. My question is, essentially:   ""Say a typical large employer X gives you 'healthcare' as a benefit on   top of your salary. In fact, how much does that cost corporation X   each year?"" ie, meaning, in the US, about how much does that typically   cost a corporation X each year? That's a good question because they may qualify for tax advantages by offering to a number of employees and there may be other benefits if they encourage certain tests (like blood work and they waive the monthly fee).  More than likely, using the above equation may be the maximum that they'll pay each year per employee and it might be less depending on the tax qualifications.  You can read this answer of the question and it appears they are paying within the range of these premiums listed above this." "For the person being hired this is a tricky situation. Specially with the new laws. There is no real magic number that can be applied as a lot will depend on what benefits you want, and what is actually available. This will really shift the spectrum quite a bit.  Under the affordibal care act, everyone has to have insurance or pay a ?fine? (were really not sure what to call this yet) but there are two provisions that really mess with the numbers you look at as an employee.  First, the cost of heath care has skyrocketed. So the same benefits that you had 5 years ago now cost maybe 10-15 times as much as they used to. This gets swept under the rug a bit because the ""main costs"" of insurance has only increased a tiny amount. What this actually comes down to is does your new ACA approved heath plan cover exactly the benefits you need, or does it cut corners.  Sorry this is complicated, and I don't mean it to come off as a speech against the ACA so I will give an example. My wife has RA, she really has it under control with the help of her RA doctor. This is not something she ever wants to change. Because she has had RA from the age of 15, and because it's degenerative, she doesn't want to spend 5 years working with a new doctor to get to the same place she is with her current doctor.  In addition, the main drugs she takes for RA are not covered under any ACA plan, nor are the ""substitutions"" that her doctor makes (we are trying to have kids so she has to be off the main meds, and a couple of the things this doctor has tried has been meds that reduce inflammation, are pregnancy safe, but are not for the treatment of RA) You now have to take into effect rather the cost of health insurance + the cost of the things now not covered by the heath insurance + the out of pocket expenses is worth the insurance.  Second the ACA has set up provisions to straight up trick those people that have lower income and are not paying close attention. When shopping for insurance, they get quotes like ""$50 a month"" or ""$100 a month"". The truth is that the remainder of the actual cost is deducted from their tax returns. This takes consideration, because if you thing your paying $50 a month for insurance but your really paying $650 then you need to make sure your doing your math right. Finally, you need to understand how messed up things are right now in the US with heath care. Largely this goes unreported. I'm not really sure why. But in order to do this I will have to give examples.  For my wife to see a specialist (her RA doctor) the co-pay is $75. So she goes to the doctor, he charges her $75 and bills the insurance $200. The insurance pays the doctor $50. With out insurance, the visit costs $50.  At first you want to blame the doctor for cheating the system, but the doctor has to pay for hours of labor to get the $50 back from the insurance company. From the doctors perspective it's cheaper to take the $50 then it is to charge the insurance company. And by charging the insurance company he has no control over the cost of the co pay. He essentially has to charge more to make the same money and the patient gets the shaft in the process. Another example, I got strep throat last year. I went to the walk in clinic, paid $75, saw the doctor got my Z-Pack for $15, went home crawled in bed and got better. My wife (who still had separate insurance from before the marriage) got strep throat (imagen that) went to the same clinic, they charged her $200 for the visit ($50 co-pay) and $250 for the z-pack ($3 co-pay). The insurance paid the clinic $90 for the visit and $3 for the drugs. Again the patient is left out in this scenario. In this case it worked better for my wife, unless you account for the fact that to get that coverage she had to pay $650/month.  My point is that when comparing costs of heathcare with insurance, and without out insurance, its often times much cheaper for the practices to have you self pay then it is for them to go through the loops of trying to insurance to make them whole. This creates two rates. Self pay rates and Insured rates. When your trying to figure out the cost of not having insurance then you need to use the self pay rates. These can be vastly different.  So as an employee you need to figure out your cost of heath care with insurance, and your cost of heath care without insurance. Then user those numbers when your trying to negotiate a salary. The problem is that there is no magic number to use for this because the cost will very a lot. For us, it was cheaper to not have insurance. Even with a pre-existing condition that takes constant attention, it's just better if we set aside $500 a month then it is to try to pay $750 a month. That might not hold true for everyone. For some people or conditions it may be better to pay the $750 then to try to handle it themselves.  So for my negotiations I would go with x+$6,000 without insurance or x+$4,500 with insurance.  Now as an employer it's a lot simpler. Usually you have a ""group plan"" that offers you a pretty straight $x per year per person or $y per year per family. So you can offer exactly that. Salary - $x or Salary - $y. AS a starting point. However this is where negotiations start.  If your offering me $50,500 and insurance, I would rather just have $57,000 and no insurance. Of course your real cost is only $55,000 cause you don't care about my heath care costs only about insurance costs. So you try to negotiate down towards $55,000 and no insurance. But that's not good enough for me. So I either go else where and you loose talent, or I accept $50,500 and insurance (or somewhere in between)." You could probably see prices at one of the Obamacare websites.  I'm on Obamacare in Massachusetts, and the premiums for me ranged from about $300-600 per month.  For a couple, you just multiply by two (couples don't get any discounts over single people).  So for a couple, the cost is about $600-$1200 per month. I never looked at family prices because I don't have kids, but I think the family plans are not that much more than the plans for a couple. "Many answers here have given what look to be useful perspectives on your question.  I want to point out an interesting technical issue. If an employer contracts with an insurer, it agrees to cover all employees (or all that fill some pre-specified definition and no one else), and to offer only a limited range of options. If you buy insurance directly, you obviously have a huge range of choices, including the (technically illegal) one of no insurance at all. Your first thought is probably, ""Hey, that's great! More options, more chances to pick the plan that's right for me."" Sorry, no.  Yes, you have more options, but so does everyone else. If you are working for some large company, you get insurance, period. If you suspect you have an expensive health condition, you cannot buy more insurance; if you believe yourself to be healthy as a horse, you cannot get skimpier insurance and pocket the difference.  Healthy people and sick people are all in the same predictable pool. If you buy insurance freely, the insurer knows that the sicker you are, the more likely you are buy insurance, a phenomenon called adverse selection.  As a result, the premiums (fees) a person buying his own insurance pays are much higher, because most of his fellow policy-holders are sickly -- even if he himself is just risk-averse. On the other hand, if you are risk-neutral, if you can survive a $10,000 bill if it happens to arise, you can save big by finding the skimpiest imaginable insurance, where all your fellow policy-holders will be hale and healthy people like yourself." There is some magic involved in that calculation, because what health insurance is worth to you is not necessarily the same it is worth for the employer. Two examples that illustrate the extreme ends of the spectrum: let's say you or a family member have a chronic or a serious illness, especially if it is a preexisting condition - for instance, cancer. In that case, health insurance can be worth literally millions of dollars to you. Even if you are a diabetic, the value of health insurance can be substantial. Sometimes, it could even make financial sense in that case to accept a very low-paying job. On the other extreme of the scale, if you are very young and healthy, many people decide to forego insurance. In that case, the value of health insurance can be as little as the penalty (usually, 2% of your taxable income, I believe). Healthcare for the employee is more valuable to the employer than is providing healthcare for the rest of the family members.  Depending on the family situation, you're going to see significant differences in price between out of pocket costs for insurance of just the employee, vs cost for insuring the entire family.  This is because in the first instance the insurance is more subsidized by the company (as a percentage of the total cost).   The costs to the company for insuring just the individual (mid-career) are in the neighborhood of $5000 per year.  If this is all that's being negotiated (single person coverage) then I would use that amount as a baseline.
&gt;and healthcare (and not sending them into poverty because of it)  Healthcare in America is both the least effective and most expensive than any other developed nation. People go into poverty trying not to die on a daily basis, because our healthcare system fails to cover them That's because *healthcare* is in a spiral. If insurance is paying 0.28 cents on the dollar average for care, any sane doctor is going to raise rates which in a grasp for more profits will cause insurance premiums to rise.  You shouldn't be insuring something subjective like quality of life. It's dumb. Insurance should be based on binary states, and healthy/unhealthy just isn't an actual set of binary states. It's difficult to quantify the intangible benefits, so I would recommend that you begin by quantifying the financials and then determine whether the difference between the pay of the two jobs justifies the value of the intangible benefits to you. Some Explainations You are making $55,000 per year, but your employer is also paying for a number of benefits that do not come free as a contractor.  Begin by writing down everything they are providing you that you would like to continue to have.  This may include: You also need to account for the FICA tax that you need to pay completely as a part time employee (normally a company pays half of it for you).  This usually amounts to 7.8% of your income. Quantification Start by researching the cost for providing each item in the list above to yourself.  For health insurance get quotes from providers.  For bonuses average your yearly bonuses for your work history with the company.  Items like stock options you need to make your best guess on. Calculations Now lets call your original salary S.  Add up all of the costs of the list items mentioned above and call them B.  This formula will tell you your real current annual compensation (RAC): Now you want to break your part time job into hours per year, not hours per month, as months have differing numbers of working days.  Assuming no vacations that is 52 weeks per year multiplied by 20 hours, or 1040 hours (780 if working 15 hours per week).  So to earn the same at the new job as the old you would need to earn an hourly wage of: The full equation for 20 hours per week works out to be: Assumptions DO NOT TAKE THIS SECTION AS REPRESENTATIVE OF YOUR SITUATION; ONLY A BALLPARK ESTIMATE You must do the math yourself.  I recommend a little spreadsheet to simplify things and play what-if scenarios.  However, we can ballpark your situation and show how the math works with a few assumptions. When I got quoted for health insurance for myself and my partner it was $700 per month, or $8400 per year.  If we assume the same for you, then add 3% 401k matching that we'll assume you're taking advantage of ($1650), the equation becomes: Other Considerations Keep in mind that there are other considerations that could offset these calculations.  Variable hours are a big risk, as is your status as a 'temporary' employee.  Though on the flip side you don't need to pay taxes out of each check, allowing you to invest that money throughout the year until taxes are due.  Also, if you are considered a private contractor you can write off many expenses that you cannot as a full time employee. "Like most forms of insurance, health insurance is regulated at the state level. So what is available to you will depend greatly upon which state you live in. You can probably find a list of insurance companies from your state's official website. Many states now provide ""insurance of last resort"" for individuals who can't get insurance through private insurance companies. You can try looking into professional and trade associations. Some offer group insurance plans comparable with COBRA coverage, meaning you'd get a group discount and benefits but without the benefit of an employer paying 30-80% of your premiums. As a software developer you may qualify for membership in the IEEE or ACM, which both offer several forms of insurance to members. The ASP also offers insurance, though they don't provide much information about it on the public portions of their website. These organization offer other benefits besides insurance so you may want to take that in to consideration. The National Federation of Independent Business also offers insurance to members. You may find other associations in your specific area. Credit Unions, Coops and the local chamber of commerce are all possible avenues of finding lower cost insurance options. If you are religious there are even some faith based non-insurance organizations that provide medical cost sharing services. They depend upon the generosity and sense of fairness and obligation of their members to share the burden of medical expenses so their definitely not for everyone." "This is the best tl;dr I could make, [original](https://www.nytimes.com/2017/07/13/business/economy/labor-market-wages.html) reduced by 78%. (I'm a bot) ***** &gt; We also do a lot of insurance restoration work like hail damage claims, and in those cases the insurance provider determines what they pay for labor and we work with it.  &gt; At the end of the day, if I were to say, &amp;quot;We&amp;#039;re a great company; we pay people double the prevailing wage, pay our insurance and taxes, buy the best materials for your house, and we give back to our community, but that means we&amp;#039;re going to charge you double for your roof,&amp;quot; I&amp;#039;m sure people aren&amp;#039;t going to say: &amp;quot;Oh, that&amp;#039;s so great they pay their employees $35 an hour. Let&amp;#039;s write them a check for twice as much as their competitor because it makes us feel good!&amp;quot; They&amp;#039;re going to do what&amp;#039;s best for their bank account and their budget.  &gt; That&amp;#039;s why for us the H-2B program is a win-win: We get great workers whom we pay well above the minimum wage, and they are low-risk temporary immigrants who come here to do the job and go home to their families at the end of the season.   ***** [**Extended Summary**](http://np.reddit.com/r/autotldr/comments/6nqns3/if_workers_are_scarce_is_it_the_work_or_the_wages/) | [FAQ](http://np.reddit.com/r/autotldr/comments/31b9fm/faq_autotldr_bot/ ""Version 1.65, ~168421 tl;drs so far."") | [Feedback](http://np.reddit.com/message/compose?to=%23autotldr ""PM's and comments are monitored, constructive feedback is welcome."") | *Top* *keywords*: **pay**^#1 **wage**^#2 **work**^#3 **want**^#4 **people**^#5" This is very interesting, and I am fully in support of the US moving to a single-payer system such as we have here in the UK, but I am a little confused. US costs are markedly higher than the second most expensive country, that's clear. However, by my reading of the data presented, it seems as though no distinction is made between the government paying for health care, and the individual paying for health care. Much of that 1.4t is coming out of the individual's pocket, rather than the insurance company's, and that for me is the crux of the whole issue. "Thank goodness you replied again before i did i completely forgot to respond and that notification was a good reminder. Im genuinely enjoying the conversation and sorry about the name calling most of my political and economic debates happen with family where name calling is not only accepted but expected lol.    &gt; Too many people walk into the emergency room uninsured, or under-insured. They get emergent care that they are not covered for, and the hospitals jack up the prices greatly in the hopes of getting a larger portion reimbursed by Medicare  [this link] (https://insight.kellogg.northwestern.edu/article/who-bears-the-cost-of-the-uninsured-nonprofit-hospitals) seems to contradict that statment. i dont know enough about the system to say youre wrong but it doesnt sound very real to me.   &gt;Again, Switzerland has lower tax rates than the US, but they don't even crack the top 20 when it comes to countries with low taxes.  Youre obviously not wrong but there are many places on that list id love to retire in. Amongst the developed world from what im seeing [here] (https://en.wikipedia.org/wiki/List_of_countries_by_tax_rates) has the 27th lowest individual income tax rate when it applies to there highest bracket. now i use the term ""developed"" very loosely here as there are countries ahead of them on that list that clearly arent part of the developed world but its not up to me to decide what the swiss rank is.  &gt;So you work in construction, an industry in which commercial is notorious for underbidding a contract (whether to government or to private), and then running into unexpected overages that cause the job to go over schedule, over budget.  This is dangerously false. The industry isnt known for underbidding and going over budget. Only really really really bad contractors do that. What a lot of good contractors do is, when you know a general contractor for a long time or youre trying to to build a relationship you do eachother favors so they will say for instance ""hey man i dont have the budget to pay you what you need so take a loss on this one and we'll take care of you on the next one"" or they will find some money unaccounted for in the budget and throw it your way in the form of extra work done.   &gt;Its not like the government just sits around and takes it. I know of at least one federal contractor who went to federal prison for fraudulently winning contracts in my part of the country.  In my line of work they really do just sit back and take it, from what ive experience you have to be super greedy and really fuck up to get their attention. 1 job i did, i was only there for 3 weeks total and in that 3 week period i saw all types of osha violations, rescource waste, time waste and plenty of govenrment workers who didnt really know what they were doing ""checking"" on the job to make sure progress was being made.   &gt;It is because government has tremendous resources that they can throw at a problem.  This is where we really do differ, i see this as a bad thing. I see it as them not spending money efficiently money that they got from me and my hard work. Look at the f22 raptor for instance it is now 3 times over budget from the projections for how much of an upgrade? Whats the point of a contract if someone can just go over budget 3 times over without anyone blinking an eye. Why not just say ""get it done and bill us"". I understand your point of view completely i just vehemently disagree with it especially because i think the government source of revenue is based around theft." &gt; Currently many people are still getting virtually free healthcare as an untaxed employee benefit and therefore care nothing about anyone else.      If they only knew how much their salary increases are being eaten up by rising healthcare costs.  We are all paying for it. Health insurance varies wildly per state and per plan and per provider - but check them out to have a baseline to know what it should cost if you did it yourself. Don't forget vacation time, too: many contract/comp-only jobs have no vacation time - how much is that 10 or 15 days a year worth to you? It effectively means you're getting paid for 2080 hours, but working 2000 (with the 2 week number). Is the comp-only offer allowing overtime, and will they approve it? Is the benefits-included job salaried? If it's truly likely you'll be working more than a normal 40 hour week on a routine basis (see if you can talk to other folks that work there), an offer that will pay overtime is likely going to be better than one that wouldn't .. but perhaps not in your setting if it also loses the PTO. "This is the best tl;dr I could make, [original](https://www.nytimes.com/2017/07/10/opinion/health-insurance-free-market.html) reduced by 71%. (I'm a bot) ***** &gt; A believer in free-market medicine, Mr. Ryan has said about health care: &amp;quot;You get it if you want it. That&amp;#039;s freedom.&amp;quot; Yet being given services without your consent, and then getting saddled with the cost, is nothing like freedom.  &gt; Deep down inside, we all intuitively know that health care is not a free market, or else society would not allow me to routinely care for people when they are in no position to make decisions for themselves.  &gt; If we believe that those lying there in their most vulnerable moments deserve a shot, then we need to push forward with the idea that health care, at its core, must be designed around a caring system that serves all people fairly.   ***** [**Extended Summary**](http://np.reddit.com/r/autotldr/comments/6mg1al/dont_leave_health_care_to_a_free_market/) | [FAQ](http://np.reddit.com/r/autotldr/comments/31b9fm/faq_autotldr_bot/ ""Version 1.65, ~163842 tl;drs so far."") | [Feedback](http://np.reddit.com/message/compose?to=%23autotldr ""PM's and comments are monitored, constructive feedback is welcome."") | *Top* *keywords*: **care**^#1 **health**^#2 **free-market**^#3 **want**^#4 **believe**^#5" Without Obamacare I would be without insurance. Also, if you follow economic theory, the cheapest way to provide healthcare is to have a large amount of people paying into the same pool. The largest pool would be the entire population. The only way for that to function would be to pay the government to provide healthcare for all.   There is an economic academic paper on this subject. I'll post it in an edit once I find it. "The company itself doesn't benefit. In most cases, it's an expense as the match that many offer is going to cost the company some percent of salary.  As Mike said, it's part of the benefit package. Vacation, medical, dental, cafeteria plans (i.e. both flexible spending and dependent care accounts, not food), stock options, employee stock purchase plans, defined contribution or defined benefit pension, and the 401(k) or 403(b) for teachers. Each and all of these are what one should look at when looking at ""total compensation"". You allude to the lack of choices in the 401(k) compared to other accounts. Noted. And that lack of choice should be part of your decision process as to how you choose to invest for retirement. If the fess/selection is bad enough, you need to be vocal about it and request a change. Bad choices + no match, and maybe the account should be avoided, else just deposit to the match.  Note - Keith thanks for catching and fixing one typo, I just caught another." I'm an independent tech contractor in Canada.  The single payer health care makes it so much easier to be a contractor or to create a startup.  I have to wonder if the lack of healthcare in the US is the result of businesses trying to retain white collar workers that would otherwise go independent.  In this environment, it's little surprise that I prefer getting those big cheques over getting benefits.  Usually the benefit packages are little more than dental, many of which only provide partial coverage. "Well, really, we decided that we wanted a basic level of care, but ONLY if you're REALLY poor or old.  If you're working an okay job, then your employer must give you healthcare, unless they're too small, or really don't want to and make you work a few less hours so you get two part-time jobs.  The role of government in the markets is to manipulate incentives towards ""good""(e.g. employing people) activities and away from ""bad""(e.g. polluting) activities.  You really can't get that mad at companies for leveraging those incentives.  I've got a puppy right now.  If she misbehaves, it doesn't help me to punish her other than to make me feel better.  What fixes things, is to change my behavior so that she is rewarded for doing what I think is ""good""(e.g. chewing her toy) not what I think is ""bad""(chewing my shoes).  Sure, we can say, ""Bad Wal-Mart! Bad Company!"" but that's not going to do anything except make us feel better." Interesting, I know a fair few doctors and lawyers (heck my fiance is a doctor) and it's not that common to earn more than $300k at 30 years old. Maybe it's more common at 50+? I know for doctors it's all dependent on your specialty, for example it's pretty common for surgeons to earn more than $300k but not so much for specialists in other fields such as palliative care or general practitioners. Then again I don't live in America so maybe it's different there.