Qualifying private health service plans, such as the Health Care Spending Account (HCSA), are very common nowadays. Not only is the Health Care Spending Account a compensation tool for employees but there are also tax benefits available for both employer and employee. Premiums paid by the employer are tax deductible. Premiums paid by the employee qualify for the medical expenses tax credit, and contributions paid by the employer and the value of any benefit received from the plan are not taxable to the employee.
Reimbursements of Health Care Spending Account premiums paid by an employee are considered non-taxable benefits.
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