The full cost of employer-sponsored health coverage is reported on the W-2 in Box 12 under code DD. That figure is the combined employer and employee cost, is informational rather than taxable, and subtracting your own payroll deductions leaves what the employer actually contributes. Employers issuing fewer than 250 W-2s are generally exempt from reporting it, so the box is sometimes empty.
The number that matters is the employer’s share
Health coverage is the largest non-cash item in most packages and the one people are least able to put a figure on. Not the plan’s headline value, not the deductible, not the size of the network. What the employer pays each month toward your premium is the part that functions as compensation.
That figure is the only one that belongs in a package comparison, and it is a perfectly fair question at offer stage. Ask for the monthly employer contribution and the monthly employee contribution, specifically for the coverage tier you would actually choose. Employee-only and family figures are frequently very far apart.
People negotiate for weeks over base salary and never ask this question at all. It does not appear on the offer letter, asking feels like a detail, and the answer routinely moves the comparison by more than the salary difference under discussion. It takes one sentence in an email to get.
The document that already reports it
For a job you already hold, the figure exists and you have probably filed it. The full cost of employer-sponsored health coverage is reported on your W-2 in Box 12 under code DD. It is informational rather than taxable, so nothing about it affects what you owe.
That number is the combined employer and employee cost for the year. Subtract your own payroll deductions from it and what remains is what your employer actually contributed on your behalf. That is a precise figure for your current job, which gives you something concrete to compare an offer against rather than an impression.
One caveat worth knowing: employers issuing fewer than 250 W-2s are generally exempt from reporting it, so the box is sometimes simply empty. If yours is blank, ask your benefits team for the annual employer contribution instead. They have the number and it is not a sensitive request.
Why this line is bigger than people assume
Employer premium contributions are frequently worth several thousand dollars a year for an individual and well into five figures for a family. Set that against a base salary difference of two or three thousand between two offers and it becomes obvious which line deserves the attention.
The disparity between how much the two are discussed is striking. Base pay gets negotiated, benchmarked and argued over. The premium share gets a paragraph on a benefits page and no questions at all. One of those numbers is larger and it is not always the one people focus on.
The three numbers to compare
Your own monthly premium for the tier you would pick comes straight out of your pay and reduces take-home directly. The deductible and the out-of-pocket maximum come next, and the maximum is the more important of the two. It caps your worst possible year, and a low premium sitting on a high maximum is a bet that you stay healthy.
The third is whether your doctors and your medications are actually covered under the plan. A cheaper plan that excludes the specialist you already see is not cheaper in any meaningful sense. Check the formulary and the network before comparing premiums, because the premium only means something once you know what it buys.
Pre-tax makes it worth more than it looks
Your premium contribution generally comes out of pay before tax, so a dollar of premium costs you less than a dollar of take-home. The exact saving depends on your bracket and it is not trivial. That makes a direct comparison between premium dollars and salary dollars slightly favorable to the premium side.
The same treatment applies to health savings and flexible spending accounts. Any employer contribution into an HSA is straightforwardly additional compensation, and it is one of the more commonly unclaimed items in a benefits package. Ask whether one exists, because it will not be volunteered.
Comparing two offers properly
Take each offer’s base salary and add the annual employer premium contribution. Then subtract your own annual employee contribution from each. Finally, note each plan’s out-of-pocket maximum alongside the result as the risk you would be carrying.
What emerges is frequently different from the base comparison and occasionally reversed outright. A base $4,000 higher against a premium share $6,000 worse is a lower offer by two thousand dollars. Nothing about the offer letters would tell you that.
A worked comparison
Offer A pays $95,000 and contributes $1,100 a month toward a family plan, leaving you paying $350. Offer B pays $101,000 and contributes $600, leaving you paying $850. B looks six thousand dollars better and the letters say nothing else about it.
Offer A costs you $4,200 a year in premiums and Offer B costs you $10,200. That is a $6,000 difference, which consumes B’s entire base advantage exactly. And that is before accounting for the premium coming out pre-tax, and before comparing the two out-of-pocket maximums.
That spread is not unusual between employers. It is the ordinary range, and it stays completely invisible unless somebody asks the question. Twenty minutes of arithmetic reversed a decision that looked settled.
The situations where this dominates everything
Three situations make coverage the single most important item in the comparison: a family plan, an ongoing condition, or a planned medical event. In any of those the difference between two employers’ coverage can comfortably exceed the entire salary difference. It stops being a benefits question and becomes the main financial question.
For a healthy individual it matters considerably less, and a lower premium with a higher maximum may well be the right trade. The condition is that the maximum has to be a number you could actually absorb in a bad year without borrowing. If it is not, the cheaper premium is buying you exposure rather than savings.
What happens when the job ends
Coverage generally ends with employment, and continuing it through COBRA means paying the full premium plus an administrative charge. That is frequently three or four times what was coming out of your pay, because you are now covering the employer’s share as well as your own.
Worth knowing before you need it rather than during the month you need it. Losing job-based coverage triggers a marketplace special enrollment period, and a subsidized plan is often far cheaper than continuation for equivalent cover. Compare both before defaulting to the continuation paperwork that arrives automatically.
The questions to ask at offer stage
Five questions cover it. What does the employer contribute monthly for the tier I would choose? What is my own contribution? What is the out-of-pocket maximum? Is there an employer HSA contribution? And when does coverage actually begin?
That last one matters more than it sounds. Coverage frequently starts on the first of the month after thirty or sixty days, which means a real gap between jobs where you are either uninsured or paying continuation rates. For a family that is one of the larger one-off costs of changing employers and almost nobody budgets for it. All five questions have definite answers and an employer with good coverage answers them readily.
Common questions
Where do I find what my employer pays for coverage?
Box 12, code DD on your W-2 reports the total cost of employer-sponsored coverage. Subtract your own payroll deductions to get the employer's share.
Is that figure taxable?
No. It is reported for information only and does not change what you owe.
Why is Box 12 code DD empty on mine?
Employers filing fewer than 250 W-2s in the prior year are generally exempt from reporting it. An empty box does not mean there was no coverage.
What should I ask about at offer stage?
The annual employer contribution for the specific plan and the coverage level you need. Employee-only and family figures are often very far apart.
Is a lower premium a better plan?
Not on its own. Check the deductible and the out-of-pocket maximum, which decide what a bad year costs you.
How do I value employer health coverage?
By the employer's monthly premium contribution for the tier you would choose — not the plan's headline value or the deductible.
Can coverage outweigh a salary difference?
Frequently. A $4,000 higher base against a premium share $6,000 worse is a lower offer, and family coverage differences can exceed the whole salary gap.
What should I ask at offer stage?
Employer and employee monthly contributions, the out-of-pocket maximum, whether there is an employer HSA contribution, and when coverage begins.