Possibly. If the plan is an accident plan under IRS Code Sec. 104, IRS Code Sec. 105, and IRS Code Sec. 106, an employer's contribution to a health and accident plan that provides sickness, injury, or preventative health benefits for its employees, their spouses, or their dependents is generally not taxable to the employees.

However, amounts received by an employee through accident or health insurance for personal injuries or sickness are included in the employee’s gross income to the extent that the amounts are attributable to contributions by the employer that were not includible in the employee’s gross income or are paid by the employer.

Note, though, that the following types of benefits under an accident or health plan are excludable from gross income: reimbursement or direct payment for medical care and payment for permanent injury or loss of bodily function. To be excludable, reimbursement or direct payment for medical care should not exceed the employee's medical expenses. In addition, for the exclusion for permanent injury or loss of bodily function to apply, the payments must be computed based on the nature of the injury, without regard to the period of absence.

Source: CCH Employee Benefits Management Newsletter, April 18, 2012; IRS Code Sec. 105(a), IRS Code Sec. 105(b), IRS Code Sec. 105(c), and IRS Code Sec. 213(d).