Resources

Cafeteria Plan Regulations for Group-Term Life Insurance Premiums

Date:
03/31/2008

Source:
Walter W. Miller

Link:

Description:
Many employers that provide group-term life insurance benefits also offer their employees the opportunity to purchase additional amounts of life insurance coverage on a voluntary, self-pay basis. Under prior law, the premiums for the voluntary group-term life insurance coverage had to be paid on an after-tax basis. Recently issued IRS regulations now permit these premiums to be paid through a cafeteria package on a pre-tax basis. Allowing an employee to pay for voluntary life insurance premiums with pre-tax dollars can substantially reduce the employee's cost for such coverage. Moreover, it will result in employment tax savings to the employer as well. An Employee Benefits Alert discussing these advantages of a pre-tax payment approach, with examples of the available tax savings, can be viewed from the pdf link.

Download:
GTL Income.pdf