An employer pays the accident and health insurance premiums for its employees. The premiums paid by the employer are:

The premiums paid by an employer for accident and health insurance for its employees are considered deductible business expenses. This means that the employer can deduct the cost of these premiums from their taxable income. This deduction helps offset the cost of providing health benefits to employees, which is an important component of employee compensation.

When an employer provides health insurance, it is seen as a benefit that can help attract and retain talent. The deduction contributes to the overall financial strategy of a business, allowing it to manage expenses efficiently while providing valuable benefits to its workforce.

In contrast, amounts related to personal expenses for employees, such as individual health policies purchased outside of employment context, do not qualify for a business deduction. Similarly, if the premiums were fully taxable to the employees, it would negate the advantage of providing the insurance as a benefit, since it would be considered part of their taxable income. Therefore, the characterization of these premiums aligns with the business deduction framework established in tax regulations, making the correct choice clear.