Is Employer Health Insurance Pre-Tax? 
Yes ! In fact , deductions for employer sponsored health insurance is the top tax `` expenditure '' in the tax code , representing more lost tax revenue than deductions for IRA / Pension contributions -LRB- 2nd largest -RRB- and deductions for mortgage interest -LRB- 3rd largest -RRB- ; it costs five times more lost revenue than for deductions for charitable donations . Whether the employer pays 100 % of the health insurance premium or just some of the premium , the employer deducts whatever premiums it pays and the employee does not have to recognize the premiums paid on his or her behalf as taxable income . 