During our last lecture, we discussed group benefits. Group benefits include lower rates and better coverage. Employers deduct these premium costs, and employees can exclude these benefits from his/her taxable income.
First, group medical plans arrange benefits for employees, their spouses, and their dependents in the event of personal injury or illness. The COBRA act of 1986 requires an employer that maintains a group health plan and employs 20+ people to continue to provide coverage under the plan to covered employees and qualified beneficiaries. The employer can pay the premiums or require the employee to pay.
Employers also have the option to provide group term life insurance and group disability insurance. Group term life insurance must be offered on a nondiscriminatory basis. The key element is that premiums from the first $50,000 of death benefits are deductible by the employer and are excluded from an employee's gross income. Group disability insurance is offered as well and established periodic payments for an employee who is unable to work due to sickness or accidental injury.
First, group medical plans arrange benefits for employees, their spouses, and their dependents in the event of personal injury or illness. The COBRA act of 1986 requires an employer that maintains a group health plan and employs 20+ people to continue to provide coverage under the plan to covered employees and qualified beneficiaries. The employer can pay the premiums or require the employee to pay.
Employers also have the option to provide group term life insurance and group disability insurance. Group term life insurance must be offered on a nondiscriminatory basis. The key element is that premiums from the first $50,000 of death benefits are deductible by the employer and are excluded from an employee's gross income. Group disability insurance is offered as well and established periodic payments for an employee who is unable to work due to sickness or accidental injury.