The IRS today announced a bit of good news for employers and employees. That’s a sentence you rarely read.
As a result of the Affordable Care Act, “health coverage provided for an employee’s children under 27 years of age is now generally tax-free to the employee,” according to a press release.
What this means is that companies with cafeteria plans can allow employees “to begin making pre-tax contributions to pay for this expanded benefit,” the IRS said. The release defines cafeteria plans as those “that allow employees to choose from a menu of tax-free benefit options and cash or taxable benefits.”
Details on the IRS guidance are available here.
Read the full press release here.