The difference comes out of your paycheck, pre-tax, through payroll deductions.
How it’s calculated
It’s not just your monthly premium minus your monthly health budget. The math is done for the whole year, then split across your paychecks:
(Your total premiums for the year − your health budget for the year) ÷ the paychecks you have left in the year = your deduction per paycheck
Example (for illustration only)
Plan cost: $700/month ($8,400/year). Health budget: $500/month ($6,000/year). The difference is $2,400. If you have 26 paychecks left, that’s about $92 per paycheck.
Why paychecks left matters
Fewer paychecks left means the same amount is split into fewer pieces, so each deduction is larger. More paychecks left means smaller deductions.