Health Insurance

Tax Implications of Providing Health Insurance to Employees – 2024 Guide

Blanche Palasi
Blanche Palasi1 Jan 2024
Main Points to Understand
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Tax Deductions for Employers Offering Health Insurance
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Eligibility for Employee Deductions
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Health Insurance Tax Credit for Small Employers
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Tax Exclusions for Employees
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Frequently Asked Questions
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In Summary
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Providing health insurance to your employees supports their wellbeing and carries tax implications that can benefit your business. Health insurance for employees is a tax-deductible business expense, and small businesses may qualify for tax credits under the Affordable Care Act (ACA).

Main Points to Understand

  • Health insurance premiums are considered a business expense, hence they are tax-deductible.
  • Most health insurance, including medical, dental, and vision, could be considered business expenses.
  • Premiums and other medical expenses can only be deducted if they exceed 7.5% of your Adjusted Gross Income.
  • Tax credit programs for small businesses are available through the Small Business Healthcare Tax Credit and American Rescue Plan.
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Blanche Palasi

Blanche Palasi is a 2024 PharmD. Candidate currently attending St. John's University. A Queens native, she is passionate about helping patients identify and navigate social determinants of health.

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