Single employee - paying for health insurance premiums with pre-tax money
The answer likely depends a bit on which state you are in, but this should be true for most states.  I don't know anything about Pennsylvania specifically unfortunately. The Affordable Care Act created the SHOP marketplace, which allows small businesses to effectively form larger groups for group coverage purposes.  SHOP stands for Small Business Health Options Program, and requires only one common-law employee on payroll. This would effectively allow you to offer group coverage without having a group.  Talk to your tax accountant for more details, as this is still very new and not necessarily well understood. There are some other options, all of which I would highly suggest talking to a tax accountant about as well.  HRAs (health reimbursement accounts) allow the employer to set aside pre-tax funds for the employee to use for approved medical expenses; they're often managed by a benefits company (say, Wageworks, Conexis, etc.).  That would allow your employee to potentially pick a higher deductible health plan which offers poorer coverage on the individual marketplace (with after-tax dollars) and then supplement with your HRA. There are also the concept of Employer Payment Plans, where the employer reimburses the employee for their insurance premiums, but those are not compatible with the ACA for the most part - although there seems to be a lot of disagreement as to whether it's possible to have something effectively the same work, see for example this page versus this for example. Pre tax insurance is not possible unless the emplyer provides hsa and do a payroll deduction. Obamacare is all post tax and you can do deduction if your expenses exceeds 10%of your income
"I don't know what the OP means when he says I want to invest in health insurance from now on so that I can use the policy after I retire. Generally, a health insurance policy covers costs incurred during the current calendar year (or specific period such as July 1 of one year through June 30 of the next year) and does not cover future periods. Indeed, many policies do not guarantee renewal when the current period ends (with exceptions for employer-provided coverage through COBRA in case employment ends). So investing in a health insurance policy meaning that you pay the premiums now, and the insurance company provides the policy in the distant future is  something that is new to me. Besides, what will the policy include? If someone had bought such a policy many years ago, say, before CAT scans and MRI were developed, would the policy cover such new developments? Or the policy would cover only those procedures, tests, and medications that are available when the policy is written and the insurance premiums start to be paid? The long-term health of the insurance company is also of some concern.  When something is offered to me with a lifetime guarantee, I skeptically ask, ""My lifetime or the device's life time or the company's lifetime?""" "I was in the health insurance game for 10 years and never heard of this until the Affordable Care Act came about.  To my knowledge, there is no rule or regulation prohibiting it, however trying to get an insurer underwrite that risk is extremely unlikely. It's the same reason why you don't see AAA offering health insurance. There isn't a contractual relationship between the church and their constituents, so no underwriter worth their salt would put a reasonable price on that risk.   Members can easily come and go, and since insurance through your employer is still the dominant distribution channel for health insurance, it would be seen as an adverse risk, meaning that people who couldn't get it through ""normal"" channels must be getting it through the church, which it would then be assumed that this person applying for coverage is an ""adverse risk"" or someone who is abnormally unhealthy.  There are faith-based healthcare reimbursement programs that are NOT health insurance and do not satisfy the ACA required minimum coverages. From what I've seen and read, it's basically members of the religion or faith that pay money into the system (like paying an insurance premium) and they elect a board that basically evaluates each claim and pays or doesn't pay it, either partially or in full. While this is a nice way to get your bills paid, odds are it won't cover your $300,000 cancer treatment or your $50,000 cesarean section birth." "The editorial highlights some reasonable reforms-- consistent and transparent pricing--- and then seemingly takes a left turn. This concept or ""cutting out the middle man"" is a fantasy born of a time when local doctors provided affordable but limited care to a limited population. It's been a hollow talking point perpetuated by industry lobby in response to single-payer proposals. Keeping health care between patient and doctor doesn't address the key reasons why health insurance exists in the first place.   The author suggests government-funded escrow accounts for those who can't afford the cost of healthcare. What about those just above the needs-tested cutoff? It seems that this approach disregards and therefore punishes the middle class. Must those with chronic illness become indigent before the government will assist in their care? The point of insurance is that when you get sick, you aren't left spending your life savings on medical care. Level and transparent pricing doesn't change the fact that certain treatments are still going to be expensive. The auto insurance comparison always frustrates me because people are not cars. If your car is breaking down every 30 miles, you can take out a loan and get a new car. A new body, not so much. Furthermore, every auto insurance claim raises your premium. All of this amounts to a tax on sick people.   Single payer or even Medicaid for all (who want it) means the government has enormous pool of patients (or consumers if you wish) with which to negotiate pricing. Do you really think St. XYZ Hospital is going to cut you, an individual, a deal for no reason? Where is the leverage? Particularly in the case of emergencies?  It isn't perfect, but politicizing and misconstruing the tragic case of a brain-dead infant does not strengthen your argument. Charlie Gard's case was not a matter of death panels; it was a matter of heartbroken parents in denial that their children was not going to get better. It's indeed an ethical quandary and no doubt a tragedy, but the hopelessness of the situation was not dictated by a heartless government but by health care professionals.   This is much more than I wished to say initially, but I am tired of seeing simplified fantasy being sold as panacea for what is an extremely complicated subject. Also, I'm not a public policy scholar, but I think I've done a better job than the author." "Jeez - you want me to come over and read the articles to you as well?   &gt;Ghana operates the National Health Insurance Scheme to provide citizens with health insurance. The level of premiums citizens must pay varies according to their level of income. Most medical facilities are run directly by the Ministry of Health or Ghana Health Service.[8]  &gt;Rwanda operates a system of universal health insurance through the Ministry of Health called Mutuelle de Santé (Mutual Health), a system of community-based insurance where people pay premiums based on their income level into local health insurance funds, with the wealthiest paying the highest premiums and required to cover a small percentage of their medical expenses, while those at the lowest income levels are exempt from paying premiums and can still utilize the services of their local health fund. In 2012, this system insured all but 4% of the population.[11]  &gt;Israel has a system of universal healthcare as set out by the 1995 National Health Insurance Law. The state is responsible for providing health services to all residents of the country, who can register with one of the four national health service funds. To be eligible, a citizen must pay a health insurance tax.  Now if you want to be nitpicky about whether income-based taxes levied on an individual for nation-wide healthcare counts as ""requiring a person to purchase insurance"" you can - but I think we both know that level of semantics is reserved for people who've said something stupid and now have to retreat into word games." "I was in the health insurance game for 10 years and never heard of this until the Affordable Care Act came about.  To my knowledge, there is no rule or regulation prohibiting it, however trying to get an insurer underwrite that risk is extremely unlikely. It's the same reason why you don't see AAA offering health insurance. There isn't a contractual relationship between the church and their constituents, so no underwriter worth their salt would put a reasonable price on that risk.   Members can easily come and go, and since insurance through your employer is still the dominant distribution channel for health insurance, it would be seen as an adverse risk, meaning that people who couldn't get it through ""normal"" channels must be getting it through the church, which it would then be assumed that this person applying for coverage is an ""adverse risk"" or someone who is abnormally unhealthy.  There are faith-based healthcare reimbursement programs that are NOT health insurance and do not satisfy the ACA required minimum coverages. From what I've seen and read, it's basically members of the religion or faith that pay money into the system (like paying an insurance premium) and they elect a board that basically evaluates each claim and pays or doesn't pay it, either partially or in full. While this is a nice way to get your bills paid, odds are it won't cover your $300,000 cancer treatment or your $50,000 cesarean section birth." "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." "Even though this isn't really personal finance related I still feel like there are some misconceptions here that could be addressed. I don't know where you got the phrase ""pass-through"" insurance from.  What you're describing is a self-funded plan.  In a self-funded arrangement an employer contracts a third-party-administrator (TPA), usually one of the big health insurance carriers, to use it's provider network, process and adjudicate claims, etc.  In addition to the TPA there will be some sort of stop-loss insurance coverage on each participant.  Stop-loss coverage usually provides a maximum amount of risk on a given member and on the entire population for a given month and/or year and/or lifetime.  The employer's risk is in between the plan deductible and the stop loss coverage (assuming the stop-loss doesn't have a maximum). Almost all of the claim dollars in a given plan will come from very very few people.  These costs typically arise out of very unforeseen diagnoses not chronic issues.  A cancer patient can easily cost $1,000,000 in a year.  Someone's diabetes maintenance medicine or other chronic maintenance will cost no where near what a botched surgery will in a year. If we take a step back there are really four categories of employer insurance. Small group is tightly regulated.  Usually plan premiums are filed with a state authority, there is no negotiating, your group's underwriting performance has zero impact on your premiums.   Employers have no way of obtaining any medical/claim information on employees. Mid-market is a pooled arrangement.  The overall pool has a total increase, and your particular group performs better or worse than the pool which may impact premiums.  Employers get very minor claims data, things like the few highest claims, or number of claims over a certain threshold, but no employee specific information. Large-group is a mostly unpooled arrangement.  Generally your group receives it's own rating based on its individual underwriting performance.  In general the carrier is offloading some risk to a stop-loss carrier and employer's get a fair amount of insight in to claims, though again, not with employee names. Self-funded is obviously self-contained.  The employer sets up a claims checking account.  The TPA has draft authority on the account.  The employee's typically have no idea the plan is self funded, their ID cards will have the carrier logo, and the carrier deals with them just as it would any other member.  Generally when a company is this size it has a separate benefits committee, those few people will have some level of insight in to claims performance and stop-loss activity.  This committee will have nothing to do with the hiring process. There are some new partially self-funded arrangements, which is just a really low-threshold  (and relatively expensive) stop-loss program, that's becoming somewhat popular in the mid-market group size as employers attempt to reduce medical spend.   I think when you start thinking on a micro, single employee level, you really lose sight of the big picture.  Why would an employer hire this guy who has this disease/chronic problem that costs $50,000 per year?  And logically you can get to the conclusion that with a self-funded plan it literally costs the company the money so the company has an incentive not to hire the person.  I understand the logic of the argument, but at the self funded level the plan is typically costing north of half a million dollars each month.  So a mid-level HR hiring manager 1. isn't aware of specific plan claims or costs and is not part of the benefits executive committee, 2. won't be instructed to screen for health deficiencies because it's against the law, 3. a company generally won't test the water here because $50,000 per year is less than 1% of the company's annual medical expenses, 4. $50,000 is well below the cost to litigate a discrimination law-suit.    Really the flaw in your thought process is that $50,000 in annual medical expense is a lot.  A harsh child-birth can run in the $250,000 range, so these companies never hire women?  Or never hire men who could add a spouse who's in child bearing years?  Or never hire women who might have a female spouse who could be in child bearing years?  A leukemia diagnosis will ratchet up $1,000,000 in a year.  Spend a bit of time in intensive care for $25,000 per day and you're fired?  A few thousand bucks on diabetes meds isn't anything relative to the annual cost of your average self-funded plan. The second flaw is that the hiring managers get insight in to specific claims.  They don't. Third, you don't hand over medical records on your resume anyway. I typed this out in one single draft and have no intention of editing anything.  I just wanted paint a broad picture, I'm sure things can be nit-picked or focused on." "There are 2 different things, As per IT Act, one can get ""Medical Reimbursement"" upto Rs 15,000 which is tax free. The way it is supposed to work is an employee submits bill and employer will ""Reimburse"" upto Rs 15,000. So if one does not submit any bills, he does not get any money. If the employer has given the employee Rs 15,000 without any bills, it would have been taxed as per the tax bracket. In practise all employer factor the Rs 15,000 in the salary to the employee. If bills are submitted, then its tax free. If bill are not submitted, partially submitted, the difference is paid as ""Allowance"" and hence becomes taxable. Apart from above there is section 80D that provides additional rebate. Upto Rs 15,000 when health insurance is taken. Upto Rs 5,000 for Health checkup. Hence if you submit the details to your employer you will get rebate in tax, on Rs 5,000 it would be Rs 1,500/-. You would not get ""Reimbursement"". I should mention 20,000 under medical expenses Nope both are under different section as such you should declare these separately."