Is Health Insurance Paid By Employer Taxable?

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   Christopher Lawrence

   Insurance Broker | Financial Consultant, Lawrence Insurance Consulting, Southern New Jersey

   A standard HMO, POS, PPO, etc form of health insurance that is provided by your employer and payed for by your employer will not be taxable by the IRS. Such situations are generally governed by the princplei of constructive recipt, which basically states that an employer can redirect their employee compensation to fund employee benefits such as health insurance- pretax which avoids FICA/FUTA taxes for the employer/employee and as long as the employee does not recieve the funds but has the funds go directly from payroll to the insurance company then they will not be held liable for any tax requirements on that transation. However there are many situations in which a form of insurance will be funded in such a manner however when the policy holder files a claim they directly recieve a check, in such instances that money that is recieved will often time be taxable.

   Answered on September 20, 2013

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