Actual medical assistance by the company is now taxable and shouldered by employees

Hello Atty,

Starting this year daw po taxable na ang actual medical assistance ng company namin sa amin (employees), per BIR ruling. Fortunately, sabi ng management ay i-sho-shoulder ng company yung tax for 2011 na dapat ay burden ng employees. But for 2012, employees na ang mg-shoulder ng tax. Ang tanong po namin ay, since more than 10 years na po na wala kami (employees) binabayaran na tax sa actual medical assistance, pwede ba namin i-require ang company na i-shoulder pa rin ang magiging tax for the next and succeeding years? Based on initial calculation, ang impact po sa employees ay mga 10k - 50k per year, depende sa actual expenses.

Maraming salamat po.

you will be charged 10k annually? how much is this medical assistance?

The additional tax will depend on our actual availment. For example, the employee is confined with hospital bill amounting to 80,000.00, and the tax exempt portion is 17,200.00 [10,000.00(de minimis) + 7,200.00(premium)], and assuming the employee is in 25% tax bracket, the total additional tax to the employee is [(80,000 - 17,200) * 0.25] = 15,700. By the way, our employer is referring to BIR RR No. 5-2011. Maximum annual benefit limit is 200,000.00, so it will be around 50k additional tax to an employee per year.

do you mean your company will provide the P80,000.00 to pay for the hospital bill? or through an HMO?

if the company will provide it directly, then it is correct that you be taxed because it is considered income.

but if it is through an HMO, and you are availing of a contingent benefit, then I don't believe the de minimis rule will apply.