LTD premiums split 50/50 with employer

[Guest lindy]

I hope this is the best place for this question. When a person has a LTD plan voluntary under ERISA where premiums are split with employer 50/50%, AND these premiums show up on your pay stub as AFTER TAX, how is a LUMP SUM (Mediation/court) settlement taxed or not?

I realize that if damages on the settlement are compensatory, there is no tax (in general) BUT, how does this premium paid by 50/50 fit in or does it? Is it both or does the 50/50 I must pay tax employer didn't fit in???

I hope this makes sense. Thanks a lot.