ER Health on a Pay Stub: What Is It & How Does It Work?

ER health on a pay stub stands for “employer responsible health contributions.” This refers to the total amount the employer pays in the form of healthcare coverage for their employees.

Employers must ensure that the aforementioned information is shown and specified on their workers' paycheck stubs for transparency purposes.

So, if you’re eager to answer the question, ‘What does ER mean on my pay stub?’ and learn more about the importance of this pay stub abbreviation, this article is the perfect guide.

Key Takeaways

• ER health on a pay stub means ‘employer responsible health contributions’ or the amount covered by an employer for their employees’ health insurance premiums.
• Compared to the ER health on a pay stub abbreviation, EE health on a pay stub represents the health plan contributions covered by the employee.
• The most common mistakes that employers make when preparing health care plans include inputting the wrong amount for the contributions, failing to explain their health plan policies, and using outdated health insurance.

What Information Can You Find on a Pay Stub?

A pay stub primarily contains an outline of your earnings in a given pay period. It shows your gross earnings or the total amount of income you have earned based on the number of work hours you completed in a set number of days.

You can also find your net earnings, or your income after taxes and other deductions are subtracted from your gross pay. Other essential details on your paycheck stub include your federal, state, and income tax withholding.

If you elected to have a portion of your earnings deducted to contribute to health savings or retirement insurance plans, the values are shown on your pay slip as well.

Additionally, for any bonuses, overtime pay (if applicable), wage garnishment, other salary adjustments, and changes to your paid time off, you should see all this information updated every payday on your pay statement.

And since your pay stub also shows you and your employer’s name and contact information, you can use your paycheck stubs as proof of income when applying for a loan or renting an apartment.

ER Health on a Pay Stub: What Does it Mean?

ER health on a pay stub, or ER healthcare, is one of the many pay stub abbreviations that you will usually see on your paycheck. It stands for ‘employer responsible’ and details the portion of your health insurance premiums covered by the company where you work.

Some companies also use ER Health Cov or ER HCV when referring to ER on a pay stub.

Health insurance premiums are among the different voluntary contributions that employees can elect to pay monthly by having their employers deduct a set percentage from their salaries.

Employer and employee contributions to health premiums depend on the employer’s healthcare insurance of choice. In some instances, an employee may also elect to choose their preferred premiums.

Another important reason why ER health on a pay stub is a must is because of the Patient Protection and Affordable Care Act, a comprehensive law for health care reform designed to provide clearer, more affordable, and more inclusive health care coverage to everyone.

As such, for employers offering health care coverage as part of their employees’ fringe benefits and compensation packages, enforcing transparency is crucial.

Outlining the different ER health care coverage on each employee’s pay stub is also advantageous when filing returns, particularly when claiming certain tax deductions or advantages.

Employers can deduct 100% of the health premiums they cover from their taxes. On the other hand, employees may be qualified to deduct medical and dental expenses and out-of-pocket premium costs.

It is essential to note that ER health on a pay stub is different from a Health Savings Account (HSA). A Health Savings Account is a tax-advantaged account that lets eligible individuals dole out money to save for qualified medical expenses and emergencies.

On an employee’s pay stub, it's usually abbreviated as HSA contributions or simply HSA.

Other Healthcare-related Pay Stub Abbreviations

Apart from ER health on a pay stub, employees may also encounter the following terms on their paycheck stubs:

• STD ER. STD alone stands for Short-term disability insurance, an income replacement benefit meant to help supplement the earnings of an employee who is out of work following a disability claim. In that regard, STD ER represents the amount covered by the employer for the said insurance.

• LTD ER. LTD ER refers to the employer’s share of coverage when it comes to an eligible employee’s long-term disability insurance.

Understanding Medicare, Social Security, and FUTA Deductions on a Pay Stub

There are also other types of deductions listed on your pay stub, such as your Medicare and Social Security taxes.

Collectively, Medicare and Social Security taxes comprise your FICA (Federal Insurance Contributions Act). 

FICA tax deductions are quite similar to ER-sponsored healthcare deductions because employers and employees split the payments for the said tax.

To help you understand, let’s discuss how Medicare and Social Security deductions work:

#1. Medicare Deductions

Medicare deductions are shared between you and your employer, and you will each pay a 1.45% tax rate. Most US citizens and resident aliens are obliged to pay Medicare tax.

Meanwhile, if you’re a single filer who earns over $200,000, then you have to pay an additional 0.9% Medicare tax rate. The additional tax rate also applies if you’re married filing jointly, and earning more than $250,000.

If your income is $255,000 or more, then you’ll be required to pay a 1.45% tax rate on the first $200,000 of your earnings and then pay the additional 0.9% on the remaining $25,000 of your earnings.

#2. Social Security Deductions

Just like your Medicare deductions, your Social Security deductions are also shared between you and your employer. For Social Security, you each must pay a 12.4% tax rate.

The said tax rate is what helps fund the government’s benefits for Old Age Survivors, Disability Insurance (OASDI).

Social Security taxes have an income limit of $168,600. That means employees earning at least the said amount may not have to pay Social Security taxes on any amount exceeding $168,600 on their income.

#3. FUTA (Federal Unemployment Tax)

Aside from the abbreviation ER health on a pay stub, Medicare, and Social Security deductions, you might also be wondering, ‘What is FUTA on my paycheck?’.

FUTA (Federal Unemployment Tax) is levied on employers to help generate funds for the government’s unemployment insurance program. If you are based in a state that levies unemployment tax, then you’ll likely see FUTA and SUTA tax abbreviations on your pay stub.

Unlike ER health on a pay stub and FICA, FUTA taxes are covered by your employer. Employers pay a 6.0% FUTA tax rate on the first $7,000 paid to each employee within the year.

In comparison, SUTA tax rates and wage bases vary per state. In some states, such as Alaska, Pennsylvania, and New Jersey, both employers and employees pay SUTA.

Tax-exempt and nonprofit organizations are not required to pay FUTA or SUTA.

ER Health vs. EE Health on a Pay Stub

The difference between ER and EE on a paycheck is that ER stands for Employer Responsible while EE refers to Employee or Employee Paid. Both abbreviations pertain to the employee and employer’s share in a worker’s voluntary deductions.

The contributions specified under the EE on a paycheck stub will vary and depend on the type of health insurance plan offered by their employer. Typically, an employer must match their staff’s contributions to their health insurance plan.

It is essential to separately outline the contributions of employers vs. employees on the latter’s health insurance or health savings accounts.

If the contributions are combined and put under a single category, it will be difficult for employees to check whether their employers did contribute enough or if there really were any contributions in the first place.

Also, if an employee wishes to increase their payments following a salary increase, then separately documented employee and employer contributions make it easier for employers to match their payments.

ER Health on a Pay Stub: 4 Common Mistakes to Watch Out For

The following common mistakes when calculating and summarizing ER health on a pay stub

are often the result of the lack of proper planning and preparation when it comes to their preferred health plan coverage.

When these shortcomings are not addressed properly, employers end up incurring one or more of the following common ER health on a pay stub mistakes:

#1. Missing or Incorrect Amounts

When a worker’s ER health coverage on their pay stub shows an incorrect amount, it leaves employees questioning their employer’s reliability and discourages them from continuing to contribute to their health plans.

On a similar note, a company’s payroll and HR staff are responsible for overseeing and updating employees’ records, and that includes their taxes and benefits.

That said, any missing information on employee paychecks, such as the ER health on a pay stub, could mean that the HR and payroll departments are disorganized and have poor management.

#2. Outdated Health Plan Information

Aside from briefing employees on the company’s health insurance system, employers must see to it that they provide up-to-date health care coverage to their staff. Otherwise, contributing to their health plan of choice will only be useless.

According to HealthCare.gov, a health plan is grandfathered if it was purchased on or before March 23, 2010 through insurance brokers, companies, or agents. Ideally, employers and even individual taxpayers must purchase a health plan from the Health Insurance Marketplace.

Grandfathered health plans may not include key protections and rights offered by the Affordable Care Act. Once a grandfathered plan’s year ends, it will either be canceled or possibly be updated to include ACA coverages.

If the health plan is canceled, employers must purchase a new one from the same provider or purchase one from the Marketplace.

#3. Failure to Explain the Company’s Health Plan Policies

Employees must be given proper orientation when it comes to the health insurance plans and other compensation packages offered by their employer. In this manner, they can fully understand the scope of their privileges and rights when using the said benefits.

Since health plan payments are voluntary contributions, employees can still choose not to be included in the company’s policy and instead choose a different plan that best suits their needs.

For instance, an employee may prefer HRAs (Health Reimbursement Arrangements) because it allows them to pay their monthly medical expenses and premiums and get reimbursed by their employer for any qualified health costs.

#4. Not Streamlining Payroll Processes

Last but not least, errors related to ER health on pay stub may be retraced back to an inefficient payroll process. Carefully establishing a seamless payroll processing system is fundamental for all business owners.

There are dozens of practical ways that employers can boost the efficiency of their payroll process, and a proven method involves using Paystub.org’s pay stub generator.

We offer a selection of ready-made templates complete with all the important fields on a pay stub and a built-in calculator to automate the calculation for your employees’ earnings and deductions.

By pairing our generator with your existing payroll process, you can develop a well-oiled payroll administration process that minimizes errors when processing employee wages and withholding taxes, and keeping their benefits and other pay adjustments duly updated.

Final Thoughts

ER health on a pay stub is a key element to your paycheck stubs because it represents one among several other benefits offered by your employer. It helps you gauge your employer’s reliability and transparency, compensation-wise.

By understanding the importance of the said abbreviation on your pay stub, you get to assert your rights as an employee and avoid possible exploitation from irresponsible and dishonest companies.

ER Health on a Pay Stub FAQ

#1. How do ER health contributions affect my paycheck?

ER health contributions do not affect your paycheck directly. However, it represents a significant portion of the compensation benefits offered by the company or organization where you work.

#2. Is ER health the same for all employees?

No, ER health is not the same for all employees. In other words, the values reflected on ER health on their pay stub may not necessarily be similar because each employee in a company may have different premium payments or specific health insurance plans of their choice.

#3. How much do employers pay for health insurance in the US?

The amount paid by employers for health insurance costs depends on their premium or healthcare plan of choice. But, on average, the majority of employers contribute around 67% to 75% for family health insurance plans and 82% to 85% for individual premiums.