EIM21777 - Particular benefits: recommended medical treatment to help an employee return to work - miscellaneous issues
Section 320C ITEPA 2003
Insurance premiums
The exemption does not apply to insurance premiums taken out in an employee’s name to cover the cost of possible future medical treatment. In these circumstances, the expenditure is not on the provision of recommended medical treatment, but in respect of an insurance policy. The existing tax treatment is unchanged and payment of the premium remains a taxable benefit.
When a payment is made under a policy to fund treatment then this may be exempt, subject to all the qualifying conditions being satisfied. For example, where an employer uses funds from an insurance policy in its name to either pay for recommended medical treatment or to reimburse an employee, the tax exemption will apply if all relevant conditions are met.
Payment into a trust
Where an employer make a payment into a trust in respect of future claims by employees, the exemption does not apply. The payment is not made in respect of recommended medical treatment to assist an employee to return to work.