One of our clients is looking into putting in a Section 105 plan to pay for their employees’ individual health insurance premiums. Our client is thinking about dropping their group health plan and getting their employees individual health plans and contributing an amount each month towards their premiums under a Section 105 plan. The company is a corporation. Is this something they can do and if so how does it work?
I wanted to get back to you quickly on this issue as this is not allowed. An employer is not permitted to pay the premiums for an employee’s individual policy on a tax advantaged basis. Please [...]