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Tax Preference for Employer-Sponsored Insurance

Under the current tax code the amount employers spend on health insurance is tax deductible and not considered taxable compensations; similarly, employees’ contributions toward their premiums can be made with pre-tax dollars. Individuals purchasing insurance on their own do not benefit from the same preferential tax treatment.

COBRA

Consolidated Omnibus Budget Reconciliation Act of 1985. Through this act employees are able to continue their employer-sponsored coverage for up to 18 months if they…