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[quote=Anonymous][quote=Anonymous][quote=Anonymous]OP, the rules for the tax-free per month stipend say that you have to prove it's being used for health care premiums. Your employer is required to keep records, which can be audited by the IRS. If no one ever audits anyone, then you and your employer will not get caught. However, yes, legally, you must use your health care stipend for health care, or it becomes taxable income.

I had my nanny send me a copy of her receipt for paying her premium each month, and so I had it if I got audited.[/quote]

So could the money be used to pay towards the policy her spouse has her on if she can show the difference in the cost without her on it?  Does it have to be a separate policy?[/quote]

I don't think it matters as long as it's paying for the premium. If her husband's policy is actually paid for by his work, however, and she's just going to show proof of coverage, not proof of payment, then, no. It can be used to reimburse "medical expenses," which can be something other than plan premiums.

This is a really good guide to what you are allowed to do. It is called a Qualified Small Employer Health Reimbursement Arrangement: https://www.takecommandhealth.com/qsehra-guide#reimbursement-rules

You can also search QSERHA on the IRS site for the official documents. I actually liked reading the IRS documents, because they give you a lot of hypothetical situations and tell you what the deal is, and they give you sample letters you can give your employee to meet the legal requirements.[/quote]

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