Concierge medicine, also known as retainer or membership medicine, involves patients paying a fee for enhanced access to their healthcare providers. When a company contracts directly with a medical professional or clinic to provide concierge medical services for its employees, the tax treatment of these expenditures depends on several factors.
Tax Deductibility for the Company:
Employee Benefit Programs: If the concierge medical services are provided as part of an employee benefit program, the company may be able to deduct these expenses as ordinary and necessary business expenses under Internal Revenue Code Section 162. This is similar to how companies deduct health insurance premiums paid on behalf of employees. However, the services must be primarily for medical care as defined by the IRS.
Medical Expense Reimbursement Plans (MERPs): Some businesses establish MERPs, also known as Section 105 plans, to reimburse employees for medical expenses, including concierge medicine fees. These reimbursements can be deductible business expenses. Anchor Accounting & Tax
Tax Implications for Employees:
Taxable Income: The value of concierge medical services provided to employees may be considered taxable income unless the services qualify as a tax-free fringe benefit. For the benefit to be non-taxable, it must meet specific IRS criteria. Employers should report any taxable portion of the benefit on employees' W-2 forms.
Considerations:
Nature of Services: The deductibility of concierge medicine fees depends on the nature of the services provided. If the fees cover medical services such as routine physicals and examinations, they may be deductible. However, fees that grant access without specific medical services may not qualify. Turbo Tax Community
Documentation: Maintaining detailed records of the services provided and their medical necessity is crucial for substantiating deductions.
Regulatory Compliance: Businesses should ensure that offering concierge medical services complies with federal and state regulations, including the Employee Retirement Income Security Act (ERISA) and the Affordable Care Act (ACA).
Conclusion:
While there is potential for companies to deduct expenditures on concierge medical services provided to employees, the specifics can be complex and depend on various factors, including the nature of the services and compliance with tax laws. It's advisable for businesses to consult with a tax professional or legal advisor to navigate these considerations effectively.
ACTION:
Get a list of all the companies in your county that have 100 employees or more. Contact them and begin a conversation about providing psychiatric, or psychological medical services.
Contact us to show you how our EHR systems can help you prosper.
Comments