Medical insurance plans and check-ups

Medical Insurance Relief

Employers may pay medical insurance premiums for employees. This is a benefit in kind (BIK). Employees must pay Income Tax, Pay Related Social Insurance (PRSI) and Universal Social Charge (USC) on the gross premium. This is the amount due before employers deduct Medical Insurance Relief from the premium amount.

Employees can apply to Revenue to claim Medical Insurance Relief. Please see Health insurance premiums for further information.

Employee protection insurance

Employers may take out an insurance policy to cover the cost of sick pay expenses for employees. This is not considered a Permanent Health Insurance (PHI) policy for tax purposes as the proceeds would be paid to the business. In these circumstances, no BIK charge would arise for an employee.

Specific PHI cover

Specific PHI cover is a taxable benefit if the employer takes out a policy to cover the sick pay expenses of certain employees or directors. The proceeds of these policies would be paid directly to the employee or the director. The taxable value of the benefit is the premium amount paid.

Employer contributions to PHI schemes

Employers may operate a scheme where both the employer and employees contribute to insurance premiums. This scheme must have Revenue approval. Please see theTax and Duty Manual Part 15-01-10 for further information. The tax relief granted on PHI contributions is subject to a maximum of 10% of the individual's income for the year.

The combined contribution cannot be more than the 10% limit. If the overall PHI contribution exceeds 10% of the employee's income, the employer must deduct Income Tax, PRSI and USC from the excess over 10%. If the policy does not have Revenue approval, the total premium the employer pays is a BIK.

In-house medical plans

Employers may run an in-house medical plan which employees contribute to, and make claims from. Where the employer, makes no contribution to this plan, the employer will not be required to apply a BIK charge.

If the employer makes contributions to the in-house medical plan, the employer must seek Revenue approval to confirm that a BIK charge does not apply. Employers can seek approval from their Revenue office using MyEnquiries in the Revenue Online Service (ROS).

Employers may choose to employ, or pay, a retainer to a general practitioner. If employers do, any benefit received by the employees shall not be treated as a taxable BIK.

Medical check-ups

Employers may pay for one medical check-up per year for each employee. This is not a taxable benefit where the medical check-up is available to all employees and is a qualifying type. Please see Tax and Duty Manual 05-01-01n for further information. 

Note

The one check-up limit for medical services does not apply if an employment contract requires an employee to have more than one medical check-up per year.