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Recieved 1099-NEC - Company Paid Health Care Premiums

Forum|Forum|4 years ago
February 11, 2022
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My previous employer agreed to pay COBRA premiums directly to the insurer under a severance agreement. There was no mention in the agreement that this would be taxable. I reviewed a 1099-NEC that shows non employee compensation close to twenty-four thousand dollars ($24,000). I can't find much on this but from what I have read since the company paid this directly to the insurer it should not be taxable. What should I do?

Best answer by MAK70

You must contact the employer, payer or issuing agency and request a corrected document.

COBRA premiums.

The exclusion for accident and health benefits applies to amounts the employer pays to maintain medical coverage for a current or former employee under the Combined Omnibus Budget Reconciliation Act of 1986 (COBRA). The exclusion applies regardless of the length of employment, whether the employer directly pay the premiums or reimburse the former employee for premiums paid, and whether the employee's separation is permanent or temporary.

M

MAK70Answer

You must contact the employer, payer or issuing agency and request a corrected document.

COBRA premiums.

The exclusion for accident and health benefits applies to amounts the employer pays to maintain medical coverage for a current or former employee under the Combined Omnibus Budget Reconciliation Act of 1986 (COBRA). The exclusion applies regardless of the length of employment, whether the employer directly pay the premiums or reimburse the former employee for premiums paid, and whether the employee's separation is permanent or temporary.

B

Billo3

I was finding on the ADP web site saying that if the company pays directly to the health company, then it is not taxable. But I cannot find it in the tax code the ADP references.

Is this really tax free?

Thanks

AliciaP1

As MaryK1101 posted last year, the COBRA rules have not changed. If you received a 1099 for any company-paid COBRA premiums, you need to contact your old employer and have them void the 1099.

@Billo3

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