Flash News NA 2025/03/25
CIT - Increase in health insurance expenses for employees
Health insurance is an opportunity to reduce tax burdens while offering better conditions to your employees.
As part of the agreement on Salary Enhancement and Economic Growth, signed by the Government, a 20% increase in Corporate Income Tax (IRC) on these expenses was introduced. This measure will allow a reduction in taxable profits, under the terms of paragraph 2 of article 43 of the IRC Code, directly benefiting companies.
According to the provisions of paragraph 2 of this article:
"Expenditures on personal accident insurance contracts, as well as on life, illness, or health insurance contracts, contributions to pension funds and equivalent schemes, or to any complementary social security schemes that guarantee, exclusively, retirement, pre-retirement, retirement supplement, post-employment health benefits, disability, or survivor benefits for company employees, are also considered deductible expenses for the tax period, up to a limit of 15% of personnel expenses recorded as wages, salaries, or remuneration for the tax period."
It is worth noting that health and personal accident insurance are not automatically qualified as dependent labor income, and for them to be accepted for tax purposes, they must be included under article 43 of the IRC Code. They must be established for the majority of permanent employees in the company, according to an objective and uniform criterion for all employees, or within the framework of a collective labor agreement for the professional categories the workers belong to. Therefore, premiums paid for insurance (health, personal accidents, and life insurance) on behalf of employees can only be considered under article 43 - Social utility achievements, if the company has provided the same benefits for all permanent employees.
Therefore, the provision of health insurance for only one employee is framed as follows:
- Subject to taxation, under category A, according to item b) of paragraph 3 of article 2 of the IRS Code;
- Subject to social security under item a) of paragraph 2 of article 46 of the Contributory Code;
- For the company, it will be considered an expense under IRC, as it is considered income for the employee and is subject to social security.
Finally, in the case of a health insurance policy for the majority of employees:
- For the company, the expense is deductible under IRC, up to a limit of 15% of personnel expenses and is not subject to social security;
- For employees, it is not subject to IRS under category A, according to item e) of paragraph 1 of article 2-A of the IRS Code.
Conclusion
Health insurance for employees is an excellent initiative, both for companies and employees.
In general, employee health insurance offers many benefits, both from the perspective of public health and individual and organizational well-being. For companies, it is an effective way to value their employees, improve productivity, and retain talent. However, it is important that companies plan this benefit well, ensuring that it is accessible and fair for all employees and fits within the company’s budget.
At Nominaurea, we are available to support your company on all the key topics to develop your activity while always complying with all legal requirements.
We look forward to hearing from you!
