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Executive Benefits

Something special for those employees who deserve something special...

Start With the Basics:

Supplemental disability insurance plans act to bridge the coverage gap created by a group disability insurance plan that only covers a fixed limited benefit amount. Because benefits are capped, higher paid employees receive a smaller percentage of income coverage. A group plan likely discriminates against the higher paid executives. A supplemental plan fills the coverage gap.

Health Savings Accounts (HSA), section 105 plans, and sections 125 plans pay for insurance premiums and other qualified healthcare expenses. Self-employed persons may save on employee's social taxes. Larger employers may apply different contribution amounts to different employee-based classifications within the usual occupation designations applied by the corporation. You can learn more at:

Long-Term Care (LTC) insurance policies provided only for those employees the company chooses is tax deductible within age based limits. LTC insurance plans sponsored by 'C' corporations receive three items of favorable tax treatment: a) the insurance premium payments are tax deductible to the corporation within age based contribution limits. For year 2013, IRC 213(d)(1) provided for the following annual tax deduction:

Age   'C' Corporation deductible limit*

>40    $360
41-50   680
51-60   1,360
61-70   3,640
71+    $4,550;

b) premium payments are not includable in the executives income; and c) the LTC policy benefit payments for qualified expenses are free of tax impacts to the insured person; * click for other entity type tax deductions.

Legal Services and Estate Planning paid by the corporation for the executive’s legal advice and family will creation as part of the overall compensation package.

Supplemental Retirement Income and Family Protection Plans funded with cash value life insurance for those executives that the corporation chooses. Non-profit entities have certain tax advantages as well:

Supplemental Executive Retirement Plan (SERP) funded with after tax corporate dollars.

Cost sharing plan or Split-Dollar insurance provided with the help of the corporation’s checkbook.

Executive Bonus Plan utilizing premium bonus or double bonus in cash accumulation contracts.

Executive Deferred Compensation Plan or sometimes called a “401(k) look-a-like” plan helps to bridge the retirement gap caused by the deferral limits imposed on the executive group by tax qualified plan employee labor law.

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