Federal Tax Considerations for Accident and Health

Disibility

Premiums paid by employer are collected by the are deductible and taxable to employee who receives benefits

Long-Term Care Insurance

if employer pays costs are deductible to employer as business deduction and not taxable to employer. Benefits received are not taxable as income as long as they meet federal guidelines

Flexible Spending

is pre-tax money and thus benefits received are income tax free

Group AD&D

premiums for employers are deductible as business expense and not taxable to employee income

Sole Proprietors AD&D

premiums fully tax deductible to business

Individual AD&D

premiums non-taxable and any benefits collected are income tax free

Individual Medical Expense

premiums not tax deductible from income. may qualify for itemized deduction for un-reimbursement medical expense if expenses exceed 7 1/2% of adjusted gross income

Business Overhead Expense

premiums tax deductible as business expense and thus benefit, when received, is taxable