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Tax-free healthcare coverage now available for employee children under 27Posted On Thu, April 29, 2010
On Tuesday, the Internal Revenue Service announced that employees with children under the age of 27 will now be able receive tax-free coverage for them under their health insurance plans.
Changes made to the Affordable Care Act now makes this coverage for employee children tax-free. Employers with cafeteria plans are now able to allow their employees to make pre-tax contributions in order to pay for this expanded benefit. Cafeteria plans permit workers to choose from a variety of cash or taxable benefits and tax-free benefit options.
IRS Commissioner Doug Shulman said that "these changes give employers a unique opportunity to offer a worthwhile benefit to their employees. We want to make it as easy as possible for employers to quickly implement this change and extend health coverage on a tax-favored basis to older children of their employees."
The expanded health benefit is applicable to a variety of employer and retiree insurance plans, as well as for those who are self-employed and are eligible for the self-employed health insurance deduction for the federal income tax return.
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