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Employer Paid Private Health Ins Premium - taxable?

If I accept a position with a private employer and already have my own  health insurance, can the Employer (as part of my employment agreement) pay me wages AND directly pay my private health insurance premium (as a business expense) and NOT report the premiums paid on my behalf as income to me?

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Answers

There are two ways that individual health premiums can be paid for you tax free by your employer.  If the employer has or establishes a Health Reimbursement Arrangement (Known as HRA), he can contribute money to it which you can use to pay the premiums.  The withdrawal of the funds from the HRA is tax free to you (when used for qualified expenses - individual health premium is a qualified expense) for the premium payment.  Your employer can also establish a Section 125  (cafeteria plan).  He can then give you a rise for the amount of premium he wishes to reimburse you for.  You than make a pretax salary reduction for the 125 program equal to the premium and get the money returned to you tax free with proof that it went to pay the individual health premium.

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