Ref: Chief Counsel Advice 201547006

Situation:  Employee A declines health insurance coverage at his work. His spouse, B, elects to cover both of them through her work and has to pay after-tax payment of $75 for her husband’s coverage. A’s employer can reimburse A $75 as a non-taxed payment to A.  IT GETS BETTER:  The CCA goes on to say that if B has to pay $175 our-of-pocket (after tax) each month, A’s employer can reimburse the full $175 tax free to A.

The CCA has seven examples of situations that the IRS has “blessed.” Please contact us if you want to discuss your own situation.