Taxation Of Health Insurance Flashcards
1
Q
Medical expense policies for self employed persons and partners
A
Self employed
- deduct premiums if they have a net profit from business
- not covered by group policy
- benefits not taxable
Partnerships
- premiums deductible for partnership
- premiums are income to partners
- benefits not taxable
2
Q
3 types of business disability insurance
A
Buy sell
- P premiums not deductible
- Benefits tax Free
Key person
- P not deductible
- B Tax free
Business overhead expense
- P deductible
- B taxable
3
Q
Health Savings Account
A
Individually owned medical expense savings account Contributions are tax deductible Withdrawals are tax free - when used to pay medical expenses Must have a high deductible health plan Account values accumulate year to year
4
Q
High deductible health plan
A
Low premiums
High deductible
5
Q
Health Reimbursement accounts
A
Established by employer
Employer contributions are pretax
HDHP are not required
Employee can use money in the HRA to pay deductibles, coinsurance, and co-payments
Money rolls over from year to year
6
Q
Flexible spending arrangement
A
Employee authorizes employer to reduce employee salary Employer puts money into FSA account Withdrawals by employee are not taxed - only certain approved benefits Spend it or lose it. No rollover
