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Inc. Yourself, 11th Edition: How to Profit by Setting Up Your Own Corporation by Judith H. McQuown

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11Medical Benefits

Bad news. Employees of S corporations are not entitled to the medical benefits in this chapter.* These perks are only for employees of C corporations.

Now, the good news. Employees of C corporations can still enjoy “free” medical insurance and payment of medical expenses and drugs for themselves and their families. They are “free” in the sense that your corporation can write off the payments as a business expense, but the IRS does not consider them to be income to the individuals receiving them.

Although the IRS calls them “medical reimbursement plans,” your corporation can actually pay your medical bills for you and your family directly, rather than reimbursing you for your medical expenses. Although legally this plan can ...

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