Part 8 exam Fx federal tax considerations for accident and health insurance

individuals who itemize deductions can claim deductions for medical expenses not covered by health insurance that exceed what percent of adjusted gross income? 5% 7% 10% 15%

10%

For group medical and dental expense insurance, what percentage of premium paid by the employer is deductible as a business expense? 50% 60% 90% 100%

100%

an insured is covered by a partially contributory group disability income plan that pays benefits of 4,000 a month. If the insured pays 25% of the monthly premium, how much of the monthly benefit would be taxable? none 1,000 3,000 4,000

3,000

Concerning group Medical and Dental insurance, which of the following statements is INCORRECT?

Employee benefits are tax deductible the year in which they were received. correct: 1. benefits received by the employee are free from federal income tax 2. premiums paid by the employer are deductible as a business expense 3. employee paid premiums may be deducted if certain conditions are met

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

long term insurance plans are received

tax free as long as the dont exceed the daily cost

The annual contribution limit of a Dependent Care Flexible Spending Account is set by

the IRS

How do employer contributions to a Health Savings Account affect the insured's taxes?

the employer contibutions are not included in the individuals insureds taxable income

How do employer contributions to a Health Savings Account affect the insured's taxes?

the employer contributions are not included in the individuals insureds taxable income

How are excess funds in an employee's health savings account (HSA) handled?

the funds can be carried forward to next year

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

they are tax deductible

How are employer contributions to health reimbursement accounts treated in regards to taxation?

they are tax deductible

how are employer contributions to Health Reimbursement accounts treated in regards to taxation?

they are tax deductible

taxation of group medical expense premiums and benefits

premiums are tax deductible and benefits are not taxed

which of the following is NOT true of disability buy-sell coverage?

Benefits are considered taxable income to the business

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

a nontributory plan is or isnt taxable

it is taxable

under which of the following employer-provided plans are the benefits taxable to an employee in proportion to the amount of premium paid by the employer? basic medical expense disability income major medical dental expense

Disability income

what are the two types of flexible spending accounts?

Health care accounts and dependent care accounts

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

a high deductible health plan

under which condition would an employees group medical benefits be expemt from income taxes

an employees group medical benefits are generally exempt from taxation as income

Under a Key Person disability income policy, premium payments

are made by the business and are not tax deductible

HSA contributions are tax deductible are not tax deductible

are not tax deductible

group disability income insurance premiums paid by the employer are?

deductible by the employer as an ordinary business expense

Other than for a qualified life event, when can a change be made in benefits for a Flexible Spending Account (FSA)? Within 3 months of the cause of the change no changes can be made once the policy is issued during the open enrollment period at any time as necessary

during the open enrollment period

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

excessive benefits may be taxable

the benefits received by the business in a disability buy-sell policy are partially taxable fully taxable income tax free tax deductible

income tax free

which of the following is NOT true regarding a flexible spending account? it is a cafeteria plan it does not have limits on contributions it operates on "use or lose" basis It provides an opportunity to receive benefits on a pretax basis

it does not have limits on contributions