Federal tax considerations for accident and health insurance

A noncontributory group disability income plan has a 30 day waiting period and offers benefits of $2000 a month. If an employee is unable to work for seven months due to a covered disability, the employee will receive

$12,000, all of which is taxable.

An insured has a $1000 HRA account through his employer. He incurred $750 in medical expenses the first year of the plan. How much, if anything, will the insured be able to roll over toward the next year's expenses?

$250. Employees are allowed to roll over unused balances at the end of the year, so in this scenario the employee could apply $250 to the next year's expenses.

For group medical and dental expense insurance, what percentage of premium paid by the employer is deductible as a business expense?

100%

Employers can reduce health plan costs by coupling a health reimbursement account (HRA) with

A high deductible health plan

Which of the following statements is correct concerning taxation of long-term care insurance?

Excessive benefits may be taxable.

An insured makes regular contributions to his Health Savings Account. How are those contributions treated in regards to taxation?

They are tax deductible

Your client wants to know what the tax implications are for contributions to a health savings account. You should advise her that the contributions are

tax deductible

Premium payments for personally owned disability income policies are

not tax deductible

All of the following are true of the key Person disability income policy except

Benefits are considered taxable income to the business.

Which of the following is not true of disability buy-sell coverage?

Benefits are considered taxable income to the business.

An individual is insured under his employers group disability income policy. The insured suffered an accident while on vacation that left him unable to work for four months. If the disability income policy pays the benefit, which of the following would be true?

Benefits that are attributable to employer contributions are fully taxable to the employee as income.

Other than for a qualified life event, when can a change be made in benefits for a Flexible Spending Account (FSA)?

During the open enrollment period

Which of the following is incorrect concerning taxation of disability income benefits?

If paid by the individual, the premiums are tax deductible.

All of the following would be qualified as a dependent under a dependent care flexible spending account, except

Jeremy had to have both legs amputated, but he's learned how to take care of himself and to get around in a wheelchair

Which of the following is correct regarding the taxation of group medical expense premiums and benefits?

Premiums are tax deductible and benefits are not taxed