Question

Answer the following questions relative to employer-financed medical and health, disability, and life insurance plans. a. May employers deduct premiums paid on employee insurance? b. Do employees have to include such premiums in gross income? c. Are benefits paid to the employee included in the employee's gross income? a. May employers deduct premiums paid on employee insurance? Employers deduct the cost of premiums paid on medical, health, disability and life insurance coverage for employees. b. Do emplo ude such premiums in gross income? may With respec i disability policies an employee may not premiums paid by an employer in gross income. With respect to life insurance, life insurance premiums paid on his or her behalf in gross income. an employee c. Are benefits paid to the employee included in the employee's gross income? Medical and health insurance benefits are Disability benefits, paid by the employer taxable. Life insurance benefits are generally gross income.

Answer 1

a) Employers may deduct the cost of the premiums paid on medical,health,disability and life insurance coverage for employees.

b) With respect to health and disability policies an employee must include premium paid by employer in gross income. With respect to life insurance, except for a limited exclusion for group term life insurance an employee must include life insurance premiums paid on his or her behalf in gross income.

c) Medical and health benefits are excluded from gross income except when the benefits exceed the actual costs. Disability benefits ,paid by the employer are taxable. Life insurance benefits are generally excluded from gross income.