Health insurance remains deductible

Human Resource Executive Online published an article celebrating the success of the business lobby in overcoming a legislative proposal passed by the US House of Representatives that wold have limited the tax deductibility of employer provided health insurance.

Business groups were so loud in their opposition that Senate legislative proposals did not even attempt to include this provision of reform.

The basic provision of employer-provided health insurance is that the cost of the benefit is tax deductible by the employer (IRC 162) but received tax free by the employee (IRC 106).

This part of tax law is a big deal for most of us. Yet the issue seemed to have been lost in all the other complicated issues surrounding health care reform this summer.

For a more complete presentation of tax treatment of health insurance see this article.


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