Expert: Ed McFarland - 9/4/2004

Question
 The taxes aren't really the problem, but how do we document it, ex. mileage, daycare reimbursement, etc.  Thanks.
Followup To
Question -
 If an employee doesn't want our insurance, how can we pay them for not taking it?  How can we put it on their check?
Answer -
I assume the issue is you don't want to have it go through regular payroll for the taxes?

Go to your payroll provder and look to issue a section 162 bonus, you issue a double 162 for the taxes, he'll have to pay taxes on that, but it should be a smaller number.

If the payroll system allows it, the other way is putting a negative number through the deduction.

This is a good reason to use a payroll service if you aren't currently because the rules around this stuff changes regularly.

Answer
glenda,

How are you doing your benefits now?

Think of it as self-insured, they are their own provider. Instead of a payment going to a HMO, it goes to the employee. In the books it would be a payroll-benefit expense.

Hope this helps.

Good luck