Can I save my company any money and is this legal?

[Guest Rlujan]

I would like to know if my company can include the company's potion of payment on the medical plan in the employee's pay check and be on a cafeteria plan, have it be deducted through this plan as payment for the medical plan, and still be able to write it off as a company expense for the company's taxes?

[QDROphile]

Compensation to employees is generally deductible and payment of medical insurance premiums and medical expenses of employees is generally deductible if the applicable rules are followed.

Under a cafetera plan, amounts that an employee elects to recieve in cash are treated as compensation and amounts that employees choose not to receive are treated as employer payments of medical premiums or expenses.

If you are asking if an employer can get a deduction for both the amount offered as compensation (but not received by the employee in cash) and the amount paid for premiums or medical expenses (because the employee did not receive the amount in cash), the answer is negative.

There are other threads on this board that discuss various schemes for double deductions. They don't work.

[GBurns]

Including the company's portion in the employee's paycheck then having the employee deduct the entire medical premium through a cafeteria plan would make no sense and possibly could actually cost both parties more.

Almost anything included in the paycheck is deductible as a business expense by the company.

This would not be a double deduction scheme.