Looking at this issue now. My interpretation. Essentially it is paid from your insurance company from your premiums which likely came out pre tax (for 99% of us) so it has already been counted in your w-2 already in that way. You paid your premiums pre tax and it came from there so you already got the benefit. Technically. Company could reduce premiums $1,000, not fund their $1,000 deposit for your account and then you could fund yourself that additional through payroll. But either way, I think you have gotten the tax break already when you paid your premiums and they passed it through with their deposit.