Does Health Insurance Become Taxable? 
Not today , but someday it is very possible . Health insurance is about the only insurance or benefit sold where both the employer and employee get a tax break on it . The employer gets to write off the expense of providing health insurance to employees . Employees do not pay income taxes on the benefit received or any taxes on the claims paid . For several decades the government has kicked around changing the tax status to match other benefits . Things are swinging in the taxable income direction as we are now seeing the employer contribution for insurance starting to appear on W-2 , which if it is n't going to be a taxable benefit , why put it on the basic employment tax form ? 