Employer Paying for Your Health Insurance? You Could be Entitled to €200 a Year

Does your company pay for your health insurance as an employee benefit? If so, you could be entitled to up to €200 a year in tax relief. 

Claiming tax relief can often seem complex and time-consuming. But if you haven’t claimed on your company-paid medical insurance premiums over the past four years, you may be able to claim up to €800 in tax credits. 

In this article, we outline how the tax relief works, who’s eligible and how to claim your tax credits. 

How Medical Insurance Tax Works 

If your company pays either all or a proportion of your health insurance premiums as an employee benefit, the insurance provider will apply Medical Insurance Relief on the gross value of your policy to deduct taxes from the charges paid by your employer. Your employer will then pay the deducted taxes directly to Revenue. 

The total annual premiums and taxes paid on your policy will then be included on your payslip for income tax purposes. 

While people who pay for their own health insurance privately – rather than through their employer – will have the tax automatically deducted from their premiums, those receiving contributions from their employer will need to manually submit a claim for the tax relief. 

So, if your employer is funding your health insurance policy, you could be entitled to reclaim up to €200 a year from Revenue. 

Entirely Employer-Funded Policies 

If your employer pays your health insurance premiums in full, you can claim 20% of the annual costs back as tax relief – up to a maximum of €200 a year. 

For example: 

• If your annual premium is €1,200, you could claim €200 (due to the cap) 
• If your annual premium is €1,000, you could claim €200 
• If your annual premium is €800, you could claim €160 

For any children’s premiums paid in full by your employer, tax relief is capped at €100 a year. 

Partially Employer-Funded Policies 

In some cases, employers may pay a contribution towards your health insurance premiums while you pay the remaining fees. While you can still claim some tax relief on your policy, your entitlement will be calculated as 20% of the employer’s contributions, rather than the total policy premiums. 

For example, if your annual premium is €1,200, with yourself and your employer paying €600 each, you could claim €120 a year. 

Tax relief for your personal contributions will be deducted automatically as Tax Relief at Source, so you won’t be able to claim any further relief for your own contributions. 

Retrospective Tax Relief 

If you’ve benefited from company-funded health insurance for a number of years, you may also be able to claim tax relief retrospectively for up to four years – even if you’re no longer employed at the same company. 

However, claims are calculated as complete calendar years – rather than as four years exactly from the date your claim is submitted. So, if you were to submit your claim before 31st December 2021, you could be eligible for tax relief for 2020, 2019, 2018 and 2017. But if you wait until January 2022, you would no longer be able to claim for 2017. 

As a result, it may be beneficial to make your claim sooner rather than later to avoid missing out on a full year of tax relief. 

Personally-Funded Policies 

If your employer does not offer contributions towards your health insurance premiums, you may have chosen to take out your own health insurance policy to protect yourself and your family in the event of sickness. 

For individuals, taxes are deducted automatically as Tax Relief at Source. This means your premiums are already lower than if your employer was paying a contribution and, as a result, you will not be eligible for tax relief credits. 

For example, if a company pays a premium of €1,000 for each employee, as an individual you would pay €800 for the same policy as the 20% has been deducted automatically. 

However, if you have had company-funded health insurance within the past four years, you may be able to claim tax relief on the premiums your company paid during that time. 

How Do I Know If I’m Eligible? 

If you’re based in Ireland and receiving full or partial health insurance contributions from your employer, the chances are you’ll be eligible for tax relief as outlined above. 

However, your ability to benefit financially will depend on your current tax credits being correct. Additionally, if you currently owe money to Revenue – for example, if you owe money for taxes accrued through the Wage Subsidy Scheme – then any tax relief claimed on your health insurance will be deducted from the amount you owe. 

If you’re unsure of your eligibility or current tax circumstances, we recommend speaking with a qualified tax advisor for guidance. 

How to Claim 

You can claim your medical insurance tax relief through the myAccount portal on the Revenue website. Claims can be submitted either during the year, or after the year has ended. 

There are different processes to follow for 2019 onwards and prior to 2018. You can see the full instructions for submitting your claim on the Revenue website, here. 

The contents of this article is for informative purposes only and should not be construed as financial advice. If you require further advice on claiming tax relief, we recommend you contact a qualified tax advisor.