What is the tax status of premiums paid by an employer for accident and health insurance?

Premiums paid by an employer for accident and health insurance are considered deductible business expenses. This means that the employer can reduce their taxable income by the amount spent on premiums. This tax treatment provides a financial incentive for employers to offer health insurance benefits to their employees, as it can lower their overall tax burden while aiding in employee welfare.

It is important to note that while the employer can deduct these costs, the employees typically do not face a tax liability on the value of the health coverage provided to them, as the premiums are not considered taxable income. This favorable tax status encourages employers to invest in health insurance for their workforce, contributing to better employee health and productivity.