Taxes Consolidation Act 1997 section 112AA

Taxation of certain perquisites

Section 112AA deals with the tax treatment of discounted or free health insurance policies provided to employees of health insurance companies, tied health insurance agents, or persons connected with either.

• Where an employee of a health insurer (or tied agent) receives a free or discounted health insurance policy, the value of the discount is treated as taxable earnings of the employee.
• The discount is calculated as the difference between the relevant contract price (the arm's length market price before tax relief at source) and any amount actually paid by the employee or connected person.
• The normal benefit-in-kind rules under Chapter 3 of Part 5 and section 112A do not apply; instead, the discount is taxed as an emolument under this section.
• Tax relief at 20% is available on the deemed premium, subject to a maximum relievable premium of €1,000 per adult and €500 per child, with the relief apportioned between the notional and actual payments where the employee contributes towards the cost.