Employer allowance for insurance on W2

[thomtax]

New company operating as LLC-Partnership. The company pays each of their two employees a set amount of money each month to pay for health insurance coverage as the employee sees fit. The employer is covering the FICA. Please tell me if I am thinking wrong.

The total of these payments, after gross up calculation, should be added to the wages amount of employee's W2 form.

Or is there something special in this area that I have missed. I have gone through TTBSB section on Fringe Benefits and do not find this exact situation, although I could have overlooked something.

Thanks in advance.

LT

[JAinNC]

Since there is no qualified health plan

set up through the employer, the additional pay is taxable just like regualr compensation.
There is no tax break to the employee but is still a nice "mental benefit" and addition pay " for the employee. My main assistant had no health coverage until I offered her an addition monthly commission equal to 30% of her new health insurance premium instead of a big hourly raise.

Jeannie