Internal Revenue Code Section §106 allows Employers to deduct Group Health Insurance Premiums for their employees including the owners and officers, as long as it’s a qualifying Group Health Insurance plan as a business expense. PLUS, Employees do not have to report employer paid premiums or the benefits in their gross income! Scroll down to our references section for more details.
Providing Health Insurance (Complementary Quotes) is a GREAT way for EmployER’s to attract and retain better, stable, dependable workers. It’s also the law for large employers (over 50 lives) to meet the mandate and for the employees to meet the individual mandate.
If your employees are contributing to the premiums, their portion can also be tax deductible by using a Section §125 POP (Premium Only Plan) or a cafeteria plan.
Employees whose employers do not provide Affordable Group Coverage, might qualify for Tax Credits under Obamacare. If the employees on their own want Medical Coverage – like going to Covered CA the premiums are not deductible unless they are more that 10 % of adjusted gross income. Learn more.
Child & Related Pages
Tax-advantaged Health Savings Account to pay medical expenses not covered by insurance.
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References and Technical Links
IRS Publication — Business Expenses #535
Tax Guide to Fringe Benefits — Publication 15-B
Uncle Fed — Not a Government Agency
Internal Revenue Code Title 26 USC
Tax Facts: Employer Deduction — Password-Protected Tax Facts on Insurance — Employee Benefits goes into very detailed explanations. It can be purchased for $99 or check their website for a trial subscription.