Question

Which of the following, according to the IRS, is used to determine if a health plan qualifies for pre-tax status?

• Cancer and accident policies
• COBRA health coverage
• An employer’s self-insured plan
• Retiree health coverage

Answer 1

Correct Answer:

Option(2) or COBRA health coverage is correct answer because COBRA health coverage is used to determine if a health plan qualifies for pre-tax status. it includes medical, dental and vision coverage.

Incorrect answers:

Option(1) is incorrect answer because cancer and accident policies are not used to determine if a health plan qualifies for pre-tax status. But cancer and accident policies holders get tax deductions on these policies.

Option(3) is incorrect answer because an employer's self - insured plan is not used for determining the health plan qualifies for pre-tax status. Only COBRA health coverage is used.

Option(4) is incorrect answer because retiree health insurance an insurance provided to the former employees of the organization and it is not used for determining the health plan qualifies for pre-tax status.

So correct answer is option(2)