Tax-free reimbursement of health premiums

A: It seems like your employer does not want to include this type of reimbursement as part of your employee benefits and it is their right to decline to do so. Employers are not required to provide health benefits or to offer tax-free reimbursement of health insurance. This is completely at the option of the employer. There might have been some miscommunication about the adviser in this case; tax attorneys generally handle litigation matters but do not provide advice on the setup and operational procedures of health benefit plans. If the employer wants advice or help with the set-up of a health reimbursement plan then a payroll tax expert or employee benefit specialist is appropriate. This tax-free reimbursement plan is usually available through the company that provides your payroll service. If your employer is a small business, then this service is available at minimal fee through www.FreedomBenefits.org. Your employer may be concerned about larger issues; for example how such a benefit plan would interact with the other employee benefits or how a change at this time might affect a previous business contact with a benefit plan service provider. It is very possible that the employer simply does not want to pay the extra cost of administering a health reimbursement plan. In any event, the employer is under no obligation to discuss its planning or management rationale with employees so we may never know the real concern. We may see a change in federal tax law this year that would make health insurance premiums deductible directly by individuals on their own tax return.