Reimbursement for premiums

I'm an associate veterinarian paid on a straight salary. My employer doesn't offer group health insurance as part of my contract, but I'd like him to pay my medical insurance premiums and those of my husband and son. I checked with the IRS, and it appears that he can pay the premiums for my family tax-free. If he offers me this benefit, does he have to offer it to everyone on salary?

"To be reimbursed for employees' medical insurance premiums, your employer must have a written plan offering everyone health coverage," says Gary Glassman, CPA, a Veterinary Economics Editorial Advisory Board member and partner with Burzenski and Co. PC in East Haven, Conn. "This doesn't mean your employer is required to provide and pay for coverage for everyone, but he must offer it." To receive reimbursement, the employee must show that the amounts reimbursed were actually spent for insurance coverage.

"If your employer isn't willing to provide this benefit, he could establish a Cafeteria Plan rather than an Accident and Health Plan," says Glassman. Under these plans, commonly referred to as "125 plans," the employee receives reimbursement as a tax-free payment through a payroll deduction. "Although you pay for the benefit with this option, rather than your employer paying, at least it's on a pre-tax basis; the amounts taken from your pay are withheld before income, FICA, and Medicare taxes," he says.

Gary Glassman