Is Health Insurance Subject To FICA Taxes?

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   Christopher Lawrence

   Insurance Broker | Financial Consultant, Lawrence Insurance Consulting, Southern New Jersey

   Individual health insurance policies are of course payed with post tax dollars. Group plans can be structured by the employer so that funds are not subject to payroll taxes. This is done through setting up a section 125 payroll redirection. With a section 125 the employer can deduct the premiums from the employers wages before tax and submit those funds directly to the insurance company on behalf of the individual. With this type of set up both the employer and employee will avoid FICA and FUTA taxes on the premiums.

   Answered on October 28, 2013

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