Employer Provided Health Insurance

<div class="Section1"><br /> <br /> Nondiscrimination requirements apply to self-insured health benefits, although the IRS announced in Notice 2011-1 on December&nbsp;22, 2010, that compliance with nondiscrimination rules for health insurance plans will be delayed until regulations or other administrative guidance has been issued. This guidance remains pending. The IRS indicated that the guidance will not apply until plan years beginning in specified periods after guidance is issued. Some plans will be grandfathered.<br /> <br /> Benefits under a self-insured plan generally are excludable from an employee&rsquo;s gross income ( Q <a href="javascript:void(0)" class="accordion-cross-reference" id="8794">8794</a>). If a self-insured medical expense reimbursement plan or the self-insured part of a partly-insured medical expense reimbursement plan discriminates in favor of highly compensated individuals, certain amounts paid to highly compensated individuals are taxable to them.<br /> <br /> A self-insured plan is one in which reimbursement of medical expenses is not provided under a policy of accident and health insurance.<a href="#_ftn1" name="_ftnref1">¹</a> According to regulations, a plan underwritten by a cost-plus policy or a policy that, in effect, merely provides administrative or bookkeeping services is considered self-insured.<a href="#_ftn2" name="_ftnref2">²</a><br /> <br /> A medical expense reimbursement plan cannot be implemented retroactively. To allow this would render meaningless the nondiscrimination requirements of IRC Section&nbsp;105.<a href="#_ftn3" name="_ftnref3">³</a><br /> <br /> A self-insured plan may not discriminate in favor of highly compensated individuals either with respect to eligibility to participate (<em>see</em> Q <a href="javascript:void(0)" class="accordion-cross-reference" id="338">338</a>) or benefits (<em>see</em> Q <a href="javascript:void(0)" class="accordion-cross-reference" id="339">339</a>).<br /> <br /> <div class="refs"><br /> <br /> <hr align="left" size="1" width="33%"><br /> <br /> <a href="#_ftnref1" name="_ftn1">1</a>.&nbsp;&nbsp;&nbsp;&nbsp; IRC &sect; 105(h)(6).<br /> <br /> <a href="#_ftnref2" name="_ftn2">2</a>.&nbsp;&nbsp;&nbsp;&nbsp; Treas. Reg. &sect; 1.105-11(b).<br /> <br /> <a href="#_ftnref3" name="_ftn3">3</a>.&nbsp;&nbsp;&nbsp;&nbsp; <em>Wollenburg v. U.S.</em>, 75 F. Supp.&nbsp;2d 1032 (D.C Neb. 1999); <em>American Family Mut. Ins. Co. v. U.S.</em>, 815 F. Supp.&nbsp;1206 (W.D. Wis. 1992). <em>See also</em> Rev. Rul. 2002-58, 2002-38 IRB 541.<br /> <br /> </div></div><br />

<div class="Section1">Under the Affordable Care Act (ACA), the exclusion from gross income for amounts expended on medical care ( Q <a href="javascript:void(0)" class="accordion-cross-reference" id="8789">8789</a>) is expanded to include employer provided health coverage for any adult child of the taxpayer if the adult child has not attained the age of 27 as of the end of the taxable year. According to Notice 2010-38, the adult child does not have to be eligible to be claimed as a dependent for tax purposes for this income exclusion to apply.<a href="#_ftn1" name="_ftnref1">¹</a><div class="refs"><br /> <br /> <hr align="left" size="1" width="33%"><br /> <br /> <a href="#_ftnref1" name="_ftn1">1</a>.&nbsp;&nbsp;&nbsp;&nbsp; IRC &sect; 105(b), as amended by the Patient Protection and Affordable Care Act of 2010 and the Health Care and Education Reconciliation Act of 2010. Notice 2010-38, 2010-20 IRB 682.<br /> <br /> </div></div><br />

<div class="Section1">Employers or former employers must withhold tax from payments made to an employee for a period of absence from work due to injury or sickness. If an employer has shifted the insurance risk to an insurer or trust, no income tax need be withheld from wage continuation payments that an insurance company or a separate trust makes on behalf of the employer.<a href="#_ftn1" name="_ftnref1">¹</a></div><br /> <div class="Section1"><br /> <br /> Amounts paid as sick pay during a temporary absence under a plan to which the employer is a party may be withheld by a third party payor at the employee’s request.<a href="#_ftn2" name="_ftnref2">²</a><br /> <br /> Amounts paid by a third party are wages subject to mandatory withholding if the insurance risk is not shifted by the arrangement because the third party is acting as the employer’s agent if the employer reimburses the insurance company or trust on a cost plus fee basis.<a href="#_ftn3" name="_ftnref3">³</a><br /> <br /> </div><br /> <div class="refs"><br /> <br /> <hr align="left" size="1" width="33%" /><br /> <br /> <a href="#_ftnref1" name="_ftn1">1</a>.     Treas. Reg. § 31.3401(a)-1(b)(8); Rev. Rul. 77-89, 1977-1 CB 300.<br /> <br /> <a href="#_ftnref2" name="_ftn2">2</a>.     IRC § 3402(o); Treas. Reg. § 31.3402(o)-3.<br /> <br /> <a href="#_ftnref3" name="_ftn3">3</a>.     Treas. Reg. § 31.3401(a)-1(b)(8).<br /> <br /> </div>

<div class="Section1">An employee is a highly compensated individual if the employee falls into any one of the following three classifications:<br /> <blockquote>(1)&nbsp;&nbsp;&nbsp;&nbsp; The employee is one of the five highest paid officers;<br /> <br /> (2)&nbsp;&nbsp;&nbsp;&nbsp; The employee is a shareholder who owns, either actually or constructively through application of the attribution rules ( Q <a href="javascript:void(0)" class="accordion-cross-reference" id="301">301</a>), more than 10 percent in value of the employer&rsquo;s stock; or<br /> <br /> (3)&nbsp;&nbsp;&nbsp;&nbsp; The employee is among the highest paid 25 percent, rounded to the nearest higher whole number, of all employees other than excludable employees who are not participants and not including retired participants.<a href="#_ftn1" name="_ftnref1">¹</a> Fiscal year plans may determine compensation on the basis of the calendar year ending in the plan year.</blockquote><br /> <br /> <hr><br /> <br /> <strong>Planning Point:</strong> These requirements are not mutually exclusive. The five highest paid officers may also be among the highest paid 25 percent of all employees. However, if one of the top five officers is not in that pay range, that officer still needs to be included in the highly compensated individual category.<br /> <br /> <hr><br /> <br /> A participant&rsquo;s status as officer or stockholder with respect to a particular benefit is determined at the time when the benefit is provided.<a href="#_ftn2" name="_ftnref2">²</a><br /> <br /> <div class="refs"><br /> <br /> <hr align="left" size="1" width="33%"><br /> <br /> <a href="#_ftnref1" name="_ftn1">1</a>.&nbsp;&nbsp;&nbsp;&nbsp; IRC &sect; 105(h)(5).<br /> <br /> <a href="#_ftnref2" name="_ftn2">2</a>.&nbsp;&nbsp;&nbsp;&nbsp; Treas. Reg. &sect; 1.105-11(d).<br /> <br /> </div></div><br />

<div class="Section1">Yes.</div><br /> <div class="Section1"><br /> <br /> In computing net unreimbursed expenses for the medical expense deduction, total medical expense benefits received during the taxable year, whether received by a taxpayer or a service provider, must be subtracted from total medical expenses paid.<a href="#_ftn1" name="_ftnref1">¹</a> If reimbursements for the year equal or exceed medical expenses for the year, a taxpayer is not entitled to a medical expense deduction. Any excess reimbursement need not be included in a taxpayer’s gross income unless the reimbursements are partially attributable to the contributions of the taxpayer’s employer.<a href="#_ftn2" name="_ftnref2">²</a><br /> <br /> </div><br /> <div class="refs"><br /> <br /> <hr align="left" size="1" width="33%" /><br /> <br /> <a href="#_ftnref1" name="_ftn1">1</a>.     Rev. Rul. 56-18, 1956-1 CB 135.<br /> <br /> <a href="#_ftnref2" name="_ftn2">2</a>.     Rev. Rul. 69-154, 1969-1 CB 46.<br /> <br /> </div>

<div class="Section1">Preretirement wage continuation payments by an employer or an insurance company to an employee because of his or her sickness or disability are subject to Social Security tax (FICA) and federal unemployment tax (FUTA) for the first six calendar months after the last month in which the employee worked for the employer.</div><br /> <div class="Section1"><br /> <br /> After six months, they are exempt from Social Security and federal unemployment tax.<a href="#_ftn1" name="_ftnref1">¹</a><br /> <br /> Payments or parts of payments attributable to employee contributions made to a sick pay plan with after tax dollars are not subject to Social Security or FUTA taxes.<br /> <br /> </div><br /> <div class="refs"><br /> <br /> <hr align="left" size="1" width="33%" /><br /> <br /> <a href="#_ftnref1" name="_ftn1">1</a>.     IRC §§ 3121(a)(4), 3306(b)(4).<br /> <br /> </div>

<div class="Section1">A plan discriminates as to benefits unless all benefits provided for participants who are highly compensated individuals are provided for all other participants.<a href="#_ftn1" name="_ftnref1">¹</a> Benefits are not available to all participants if some participants become eligible immediately and others after a waiting period.<a href="#_ftn2" name="_ftnref2">²</a> Benefits available to dependents of highly compensated employees must be equally available to dependents of all other participating employees. The test is applied to benefits subject to reimbursement, rather than to actual benefit payments or claims.<div class="Section1"><br /> <br /> Any maximum limit on the amount of reimbursement must be uniform for all participants and for all dependents, regardless of years of service or age. Further, a plan will be considered discriminatory if the type or amount of benefits subject to reimbursement is offered in proportion to compensation and highly compensated employees are covered by the plan. A plan will not be considered discriminatory in operation merely because highly compensated participants use a broad range of plan benefits to a greater extent than other participants.<a href="#_ftn3" name="_ftnref3">³</a><br /> <br /> An employer&rsquo;s plan will not violate nondiscrimination rules merely because benefits under the plan are offset by benefits paid under a self-insured or insured plan of the employer or of another employer or by benefits paid under Medicare or other federal or state law. A self-insured plan may take into account benefits provided under another plan only to the extent that the benefit is the same under both plans.<a href="#_ftn4" name="_ftnref4">⁴</a> Benefits provided to a retired employee who was highly compensated must be the same as benefits provided to all other retired participants.<br /> <br /> For purposes of applying the nondiscrimination rules, all employees of a controlled group of corporations, or employers under common control, and of members of an affiliated service group ( Q <a href="javascript:void(0)" class="accordion-cross-reference" id="3929">3929</a>, Q <a href="javascript:void(0)" class="accordion-cross-reference" id="3931">3931</a>) are treated as employed by a single employer.<a href="#_ftn5" name="_ftnref5">⁵</a><br /> <br /> </div><div class="refs"><br /> <br /> <hr align="left" size="1" width="33%"><br /> <br /> <a href="#_ftnref1" name="_ftn1">1</a>.&nbsp;&nbsp;&nbsp;&nbsp; IRC &sect; 105(h)(4).<br /> <br /> <a href="#_ftnref2" name="_ftn2">2</a>.&nbsp;&nbsp;&nbsp;&nbsp; Let. Ruls. 8411050, 8336065.<br /> <br /> <a href="#_ftnref3" name="_ftn3">3</a>.&nbsp;&nbsp;&nbsp;&nbsp; Treas. Reg. &sect; 1.105-11(c)(3).<br /> <br /> <a href="#_ftnref4" name="_ftn4">4</a>.&nbsp;&nbsp;&nbsp;&nbsp; Treas. Reg. &sect; 1.105-11(c)(1).<br /> <br /> <a href="#_ftnref5" name="_ftn5">5</a>.&nbsp;&nbsp;&nbsp;&nbsp; IRC &sect; 105(h).<br /> <br /> </div></div><br />

<div class="Section1">The taxable amount of payments made to a highly compensated individual from a discriminatory self-insured medical expense reimbursement plan is the excess reimbursement.<a href="#_ftn1" name="_ftnref1">¹</a> Two situations produce an excess reimbursement.<div class="Section1"><br /> <br /> The first situation occurs when a benefit is available to a highly compensated individual but not to all other participants, or that otherwise discriminates in favor of highly compensated individuals. In this situation, the total amount reimbursed under the plan to the employee with respect to that benefit is an excess reimbursement.<br /> <br /> The second situation occurs when benefits are available to all other participants and are not otherwise discriminatory and where a plan discriminates as to participation. Here, excess reimbursement is determined by multiplying the total amount reimbursed to the highly compensated individual for the plan year by a fraction. The numerator is the total amount reimbursed to all participants who are highly compensated individuals under the plan for the plan year; the denominator is the total amount reimbursed to all employees under the plan for such plan year. In determining the fraction, no account is taken of any reimbursement attributable to a benefit not available to all other participants.<a href="#_ftn2" name="_ftnref2">²</a><br /> <br /> Multiple plans may be designated as a single plan for purposes of satisfying nondiscrimination requirements. An employee who elects to participate in an optional HMO offered by the plan is considered benefited by the plan only if the employer&rsquo;s contributions with respect to the employee are at least equal to what would have been made to the self-insured plan and the HMO is designated, with the self-insured plan, as a single plan. Regulations do not suggest how to determine contributions to a self-insured plan.<br /> <br /> Unless a plan provides otherwise, reimbursements will be attributed to the plan year in which payment is made which means they will be taxed in an individual&rsquo;s tax year in which a plan year ends.<br /> <br /> Amounts reimbursed for medical diagnostic procedures for employees, but not dependents, performed at a facility that provides only medical services are not considered a part of a plan and do not come within these rules requiring nondiscriminatory treatment.<a href="#_ftn3" name="_ftnref3">³</a><br /> <p style="text-align: center;"><strong>Contributory Plan</strong></p><br /> Reimbursements attributable to employee contributions are received tax-free, subject to inclusion if the expense was previously deducted ( Q <a href="javascript:void(0)" class="accordion-cross-reference" id="334">334</a>). Amounts attributable to employer contributions are determined in the ratio that employer contributions bear to total contributions for the calendar years immediately preceding the year of receipt, up to three years. If a plan has been in effect for less than a year, then such determination may be based upon the portion of the year of receipt preceding the time when the determination is made, or such determination may be made periodically (such as monthly or quarterly) and used throughout the succeeding period.<a href="#_ftn4" name="_ftnref4">⁴</a> For example, if an employee terminates his services on April&nbsp;15, 2025, and 2025 is the first year the plan has been in effect, such determination may be based upon the contributions of the employer and the employees during the period beginning with January&nbsp;1 and ending with April&nbsp;15, or during the month of March, or during the quarter consisting of January, February, and March.<br /> <p style="text-align: center;"><strong>Withholding</strong></p><br /> An employer does not have to withhold income tax on an amount paid for any medical care reimbursement made to or for the benefit of an employee under a self-insured medical reimbursement plan within the meaning of IRC Section&nbsp;105(h)(6).<a href="#_ftn5" name="_ftnref5">⁵</a><br /> <br /> </div><div class="refs"><br /> <br /> <hr align="left" size="1" width="33%"><br /> <br /> <a href="#_ftnref1" name="_ftn1">1</a>.&nbsp;&nbsp;&nbsp;&nbsp; IRC &sect; 105(h)(1).<br /> <br /> <a href="#_ftnref2" name="_ftn2">2</a>.&nbsp;&nbsp;&nbsp;&nbsp; IRC &sect; 105(h)(7).<br /> <br /> <a href="#_ftnref3" name="_ftn3">3</a>.&nbsp;&nbsp;&nbsp;&nbsp; Treas. Reg. &sect; 1.105-11(g).<br /> <br /> <a href="#_ftnref4" name="_ftn4">4</a>.&nbsp;&nbsp;&nbsp;&nbsp; Treas. Reg. &sect; 1.105-11(i).<br /> <br /> <a href="#_ftnref5" name="_ftn5">5</a>.&nbsp;&nbsp;&nbsp;&nbsp; IRC &sect; 3401(a)(20).<br /> <br /> </div></div><br />

<div class="Section1">No.<div class="Section1"><br /> <br /> All kinds of benefits from personal health insurance generally are entirely exempt from income tax. This includes disability income; ( Q <a href="javascript:void(0)" class="accordion-cross-reference" id="382">382</a>), dismemberment and sight loss benefits; critical illness benefits;<a href="#_ftn1" name="_ftnref1">¹</a> and hospital, surgical, or other medical expense reimbursement. There is no limit on the amount of benefits, including the amount of disability income, that can be received tax-free under personally paid health insurance or under an arrangement having the effect of accident or health insurance.<a href="#_ftn2" name="_ftnref2">²</a> At least one court has held, however, that the IRC Section&nbsp;104(a)(3) exclusion is not available where a taxpayer&rsquo;s claims for insurance benefits were not made in good faith and were not based on a true illness or injury.<a href="#_ftn3" name="_ftnref3">³</a><br /> <br /> The accidental death benefit under a health insurance policy may be tax-exempt to a beneficiary as death proceeds of life insurance ( Q <a href="javascript:void(0)" class="accordion-cross-reference" id="65">65</a>).<a href="#_ftn4" name="_ftnref4">⁴</a> Disability benefits received for loss of income or earning capacity under no fault insurance are excludable from gross income.<a href="#_ftn5" name="_ftnref5">⁵</a> The exclusion also has been applied to an insured to whom policies were transferred by a professional service corporation in which the insured was the sole stockholder.<a href="#_ftn6" name="_ftnref6">⁶</a><br /> <br /> Health insurance benefits are tax-exempt if received by the insured and if received by a person having an insurable interest in an insured.<a href="#_ftn7" name="_ftnref7">⁷</a><br /> <br /> Medical expense reimbursement benefits must be taken into account in computing a taxpayer&rsquo;s medical expense deduction. Because only unreimbursed expenses are deductible, the total amount of medical expenses paid during a taxable year must be reduced by the total amount of reimbursements received in that taxable year.<a href="#_ftn8" name="_ftnref8">⁸</a><br /> <br /> Likewise, if medical expenses are deducted in the year they are paid and then reimbursed in a later year, the taxpayer or the taxpayer&rsquo;s estate, where the deduction is taken on the decedent&rsquo;s final return but later reimbursed to the taxpayer&rsquo;s estate, must include the reimbursement, to the extent of the prior year&rsquo;s deduction, in gross income for the later year.<a href="#_ftn9" name="_ftnref9">⁹</a><br /> <br /> Where the value of a decedent&rsquo;s right to reimbursement proceeds, which is income in respect of a decedent,<a href="#_ftn10" name="_ftnref10">¹⁰</a> is included in the decedent&rsquo;s estate ( Q <a href="javascript:void(0)" class="accordion-cross-reference" id="424">424</a>), an income tax deduction is available for the portion of estate tax attributable to such value.<br /> <br /> Disability income is not treated as reimbursement for medical expenses and, therefore, does not offset such expenses.<a href="#_ftn11" name="_ftnref11">¹¹</a><br /> <blockquote><em>Example:</em> Mr. Jones, whose adjusted gross income for 2024 was $25,000, paid $3,000 in medical expenses during that year. On his 2024 return, he took a medical expense deduction of $1,125 [$3,000 &ndash; $1,875 (7.5 percent of his adjusted gross income)]. In 2025, Mr. Jones receives the following benefits from his health insurance: disability income, $1,200; reimbursement for 2024 doctor and hospital bills, $400. He must report $400 as taxable income on his 2025 return. Had Mr. Jones received the reimbursement in 2024, his medical expense deduction for that year would have been limited to $725 ($3,000 &ndash; $400 [reimbursement] &ndash; $1,875 [7.5 percent of adjusted gross income]). Otherwise, he would have received the entire amount of insurance benefits, including the medical expense reimbursement, tax-free.</blockquote><br /> <br /> <hr><br /> <br /> <strong>Planning Point:</strong> This example illustrates that the timing of medical expense payments and their submission for reimbursement may be critical to the individual&rsquo;s personal tax planning, particularly in regard to reaching the requisite 7.5 percent of adjusted gross income threshold.<br /> <br /> <hr><br /> <br /> </div><div class="refs"><br /> <br /> <hr align="left" size="1" width="33%"><br /> <br /> <a href="#_ftnref1" name="_ftn1">1</a>.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <em>See, e.g.,</em> Let Rul. 200903001.<br /> <br /> <a href="#_ftnref2" name="_ftn2">2</a>.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; IRC &sect; 104(a)(3); Rev. Rul. 55-331, 1955-1 CB 271, <em>modified by</em> Rev. Rul. 68-212, 1968-1 CB 91; Rev. Rul. 70-394, 1970-2 CB 34.<br /> <br /> <a href="#_ftnref3" name="_ftn3">3</a>.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <em>Dodge v. Commissioner</em>, 93-1 USTC &para; 50,021 (8th Cir. 1992).<br /> <br /> <a href="#_ftnref4" name="_ftn4">4</a>.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; IRC &sect; 101(a); Treas. Reg. &sect; 1.101-1(a).<br /> <br /> <a href="#_ftnref5" name="_ftn5">5</a>.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Rev. Rul. 73-155, 1973-1 CB 50.<br /> <br /> <a href="#_ftnref6" name="_ftn6">6</a>.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Let. Rul. 7751104.<br /> <br /> <a href="#_ftnref7" name="_ftn7">7</a>.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; IRC &sect; 104; <em>Castner Garage, Ltd. v. Commissioner</em>, 43 BTA 1 (1940), acq. 1941-1 CB 11<em>.</em><br /> <br /> <a href="#_ftnref8" name="_ftn8">8</a>.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Rev. Rul. 56-18, 1956-1 CB 135.<br /> <br /> <a href="#_ftnref9" name="_ftn9">9</a>.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Treas. Reg. &sect;&sect; 1.104-1, 1.213-1(g); Rev. Rul. 78-292, 1978-2 CB 233.<br /> <br /> <a href="#_ftnref10" name="_ftn10">10</a>.&nbsp;&nbsp;&nbsp;&nbsp; Rev. Rul. 78-292, 1978-2 CB 233.<br /> <br /> <a href="#_ftnref11" name="_ftn11">11</a>.&nbsp;&nbsp;&nbsp;&nbsp; <em>Deming v. Commissioner</em>, 9 TC 383 (1947), <em>acq</em>. 1948-1 CB 1.<br /> <br /> </div></div><br />

<div class="Section1">Domestic partner benefits are benefits that an employer voluntarily offers to an employee&rsquo;s unmarried partner. An employee&rsquo;s domestic partner may be of the same sex or the opposite sex. An employer determines the scope of its plan&rsquo;s definition of domestic partner.<div class="Section1"><br /> <br /> After July&nbsp;13, 2013, same-sex couples who were married in a state in which same sex marriage is recognized (the state of &ldquo;celebration&rdquo;) are considered spouses, regardless of where they live.<a href="#_ftn1" name="_ftnref1">¹</a> Under current law, same sex marriage is now recognized in all 50 states.<br /> <br /> Employers may offer a range of domestic partnership benefits, such as family, bereavement, sick leave, and relocation benefits. In general, most people mean employer-provided health insurance coverage when they speak of domestic partnership benefits.<br /> <br /> An employee is taxed on the value of employer-provided health benefits for his or her domestic partner unless the domestic partner qualifies as the employee&rsquo;s dependent under IRC Section&nbsp;151. The tax is determined by assessing the fair market value of the coverage provided to the domestic partner. This amount then is reported on the employee&rsquo;s W-2 form and is subjected to Social Security (FICA) and federal income tax withholding.<br /> <br /> Any amount received by a domestic partner as payment or reimbursement of plan benefits will not be included in the income of the employee or the domestic partner to the extent that the coverage provided to the domestic partner was paid for by the employee&rsquo;s plan contributions or the fair market value of the coverage was included in the employee&rsquo;s income under IRC Section&nbsp;104(a)(3).<a href="#_ftn2" name="_ftnref2">²</a><br /> <br /> Coverage of domestic partners, whether or not they qualify as dependents, under an employer-provided health plan will not otherwise affect the ability of employees to exclude amounts paid, directly or indirectly, by a plan to reimburse employees for expenses incurred for medical care of the employees, their spouses, and dependents.<br /> <br /> <em>Cafeteria Plans and Flexible Spending Accounts</em> &ndash; Contributions used to provide coverage for a non-dependent domestic partner are treated as taxable income. Benefits under flexible spending accounts may not be provided to a domestic partner because these accounts can include only nontaxable income ( Q <a href="javascript:void(0)" class="accordion-cross-reference" id="3501">3501</a>).<br /> <br /> <em>COBRA</em> &ndash; A domestic partner may not make an independent election for COBRA coverage, but may be part of an employee&rsquo;s election ( Q <a href="javascript:void(0)" class="accordion-cross-reference" id="356">356</a> - Q <a href="javascript:void(0)" class="accordion-cross-reference" id="376">376</a>).<br /> <br /> <em>HIPAA</em> &ndash; Domestic partners who are not dependents are not covered by HIPAA, although employers providing health insurance to domestic partners may voluntarily include them in HIPAA certification procedures.<br /> <br /> </div><div class="refs"><br /> <br /> <hr align="left" size="1" width="33%"><br /> <br /> <a href="#_ftnref1" name="_ftn1">1</a>.&nbsp;&nbsp;&nbsp;&nbsp; <em>United States v. Windsor</em>, 133 S. Ct. 2675 (2013).<br /> <br /> <a href="#_ftnref2" name="_ftn2">2</a>.&nbsp;&nbsp;&nbsp;&nbsp; Let. Ruls. 200846001, 9850011, 9717018, 9603011. <em>See also</em> Let. Ruls. 9109060, 9034048; Field Service Advice 199911012.<br /> <br /> </div></div><br />