As organizations evaluate the benefits health where refund? premiums, instead 
to pay, it is common to have questions about how a formal plan, tax benefits is a better value than giving cash employees. In this article we will walk through the tax-benefit - and cost savings -. To use a convenient repayment plan health tax
Note - This article is from our new mini webinar What are the tax advantages of using ZaneHealth? To watch two minutes webinar, click here.
Tax advantages for your organization
The use of a formal repayment plan, such as a health plan reimbursement reimbursements to employees are tax -deductible -. the same way as contributions to other benefits
This means your company saves on taxes FICA / FUTA payroll. Here is an example.
| Employer contributions | Cash | plan refund Tax-free |
| employer contributions | $ 300 | $ 300 |
| charges social (7.65%) | $ 23 | $ 0 |
| total Cost of Contribution | $ 323 | $ |
As you can see in the table, with a plan of tax benefits, the cost of providing a refund costs of $ $ 300,300.
by providing money, the cost of giving $ 300 is $ 323
Tax benefits for employees
the use of a favorable tax regime, reimbursements received by employees are tax-free -. which means they are not included in employees' gross income and employees do not pay income tax on reimbursements.
is an example.
| For employees | Cash | plane refund Tax-free |
| Money received | $ 300 | $ 300 |
| taxes paid (25%) * | - $ 75 | $ 0 |
| total amount received | $ 225 | $ 300 |
* rates vary depending on the tax bracket
As you can see in table when employees receive a refund of $ 300 with a plan of tax benefits, the actual amount to take is $ 300.
when employees receive $ 300 cash for health insurance, the actual amount to take is $ 225
Bonus Tax benefits for employees -. Premium tax credits
As an added bonus for employees, employees can access all the benefits of the modern individual health insurance market, including tax credits premium .
In the federal market to work, 87 percent of those who have chosen a health plan received a tax credit on premiums paid and, on average, only $ 82 / month.
tax credits to the premium offer individual health insurance to employees additional savings on the cost of health insurance. And brings additional value to the dollars of the company.
Conclusion
Regarding the reimbursement of individual health insurance for employees, the bottom line is reimbursed tax free is a better value than money. For example with money, the employer pays $ 323 to provide tax contribution from home $ 225. With a repayment free of tax, the employer pays $ 300 to make a contribution to take $ 300. In addition, a formal set of health benefits help small employers compete with large companies for the best talent.
For more information on how to configure and administer the tax benefits repayment plan, download this free guide.
Do you have any questions about savings or tax benefits of tax benefits repayment plan? We are happy to help you. Leave a comment or question below.
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