Readers’ forum: Health benefit

Is a health care cash plan a non-taxable benefit?

My client is a large employer of around 400 staff that is proposing to provide a health care cash plan as a benefit to its employees in reclaiming some of the costs in connection with various health treatments.

As well as providing this benefit to staff my client believes it could also be used in any future job vacancy adverts as an additional perk for anyone joining the company.

I do not believe it would qualify as a trivial benefit because there is certainly a cash value attached. But it is not a health insurance plan so presumably it would be a non-contractual benefit that can be withdrawn at any time in the future?

My client is convinced that this benefit would be non-taxable but I am not sure and would welcome any views from readers.

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