May employees purchase health care coverage for their adult child on a pre-tax basis through the employer’s cafeteria plan?
Yes. In addition to the exclusion from income of any employer contribution towards qualifying adult child coverage, employees may pay the employee portion of the health care coverage for an adult child on a pre-tax basis through the employer’s cafeteria plan – a plan that allows employees to choose from a menu of tax-free benefit options and cash or taxable benefits. The IRS provided in recent guidance [(Notice 2010-38)] that the cafeteria plan could be amended retroactively up until December 31, 2010 to permit these pre-tax salary reduction contributions. Q: It seems like plans and insurers can terminate dependent coverage after a child turns 26, but employers are allowed to exclude from the employee’s income the value of any employer-provided health coverage through the end of the calendar year in which the child turns age 26. This is confusing. A. Under the law, the requirement to make adult coverage available applies only until the date that the child turns 26. However, if coverage
Related Questions
- May employees purchase health care coverage for their adult child on a pre-tax basis through the employers cafeteria plan?
- May employees purchase health coverage for their adult child on a pre-tax basis through the employers cafeteria plan?
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