Employer-reimbursed health insurance premium: W2 issue
In mid-2025, my employer enrolled me in a QSHERA and realized I shouldn't have been taxed for previously reimbursed health insurance premiums. To "correct" this they issued an off-cycle paycheck for a "medical bonus" which my employer paid employer/employee taxes, but I didn't receive any money. Now my W-2 Box 1 wages shows my income inflated by that extra amount, pushing me into a higher tax bracket. Where should my employer have captured this amended information?
Quick Answer:
QSHERA reimbursements, when properly administered and substantiated, are generally tax-free to the employee and not subject to income or FICA taxes.
Your employer's method of correction was
Note: This answer is provided for convenience only. It is important that you speak to a CPA about your individual tax situation.
