IRS CCA: Guidance on Employer-Funded Wellness Payments (§125)

Guidance on the tax treatment of employer-funded, insured, fixed-indemnity wellness policy payments for individual income, corporate income, trust income, sales and use, excise, and property tax purposes, the Chief Counsel’s Office advised. Wellness indemnity payments under an employer-funded, fixed-indemnity insurance policy (including where the premium for the coverage is paid by employee salary reduction through a cafeteria plan under I.R.C. §125 are includible in the gross income of the employee if the employee has no unreimbursed medical expenses related to the payment. When the insured plan pays $1,000 because the employee used a wellness benefit, the $1,000 is included ...