A company has a medical reimbursement plan for officers that covers all costs that the insurer will not pay. However, for all employees who are not officers, the medical reimbursement plan applies only after the employee has paid $1,000 from his or her own funds. An officer incurred $1,500 in medical expenses and was reimbursed for that amount. An hourly worker also incurred $1,500 in medical expense and was reimbursed $500.

Question

Quizplus · Accepted Answer

The officer must include $1,500 in gross income because the medical reimbursement plan covers all costs that the insurer will not pay.

A Company Has a Medical Reimbursement Plan for Officers That