The taxation of retirees under retiree health premium arrangements

Article Abstract:

Retiree health premium plans provide employers with the opportunity to place a cap on the health benefits provided to retired employees, but certain steps must be taken to ensure that these benefits remain tax-exempt to the employee. Contributions are made to the plan to provide retirees with funds to spend on medical needs. The plan must be designed so that only accidents and medical needs are covered. The premium plan must also meet flexible spending account rules and satisfy non-discrimination testing. The plan may also operate by reimbursing the retiree for premiums paid by the retiree.

Health aspects, United States, Insurance, Retirees, Defined contribution plans

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Congress extends expiring tax provisions

Article Abstract:

Congress extended several expiring tax provisions that affect employee benefits through Jun 30, 1992. Included in the extensions are employer-provided educational assistance exclusions, self-employed health insurance deductions and group legal services exclusions. The cost of the extensions is to be covered by changes in the estimated tax payment rules for corporations. Congress promised this will be the last extension and any provisions that are deemed necessary will be made permanent.

Compensation and benefits, Corporate taxes, Self-employed persons, Self employed persons, Corporations, Employer-supported education, Employer supported education

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Payment under stock option plan not an excludable amount received under an accident or health plan

Article Abstract:

The Tax Court held in Fisher v Commissioner that payments received by participating in an employer's restricted stock plan could not be excluded from income under the guise of monies received from a health or accident plan. The court agreed that plans can be dual-purpose, but found that the stock option plan in this case had no characteristics indicating employer intent for it to double as an accident or health plan.

Cases, Tax exclusion, Employee stock options

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