Frequently Asked Tax Questions And Answers
Keyword: Health Insurance Premiums
12.3 Small Business/Self-Employed/Other Business : Form W–2, FICA, Medicare, Tips, Employee Benefits
Can an employer pay for health care costs of an employee as a fringe benefit?
Yes, generally an employer may pay for health care costs of an employee as a nontaxable
fringe benefit. Refer to Publication 535, Business Expenses , for a
complete discussion of employee benefit programs.
References:
If our company pays for the employee's health care costs directly to the
medical facility, as opposed to a reimbursement, is the employee benefit reported
on Form W-2 and subject to social security withholding?
Health care costs paid directly to the medical facility is normally a nontaxable
employee benefit provided that it is paid as part of an accident and health plan.
Refer to Publication 535, Business Expenses, for more information on
employee benefit programs.
References:
If an employer pays health insurance benefits for the employee and dependents,
are both the employee's and the dependent's benefits income to the employee?
If an employer provides health insurance for the employees, the benefit provided
is generally not taxable to the employee. An employer can generally deduct the cost
of a group health plan on the "employee benefit programs" line of their business income
tax return.
Group health plan defined: This (including a self-insured plan) is a plan that
provides medical care to your employees, former employees, and their spouses and dependents.
The plan can provide care directly or through insurance, reimbursement, or otherwise.
The employer can exclude the cost of providing group health insurance to an employee
from his or her wages.
References:
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