It is common for executive employment, severance and change of control agreements to include post-employment medical benefits or features. These provisions can take myriad forms, but the most common include the following:
1. The executive is provided subsidized coverage under a plan that covers active employees for some period of time (e.g., two years). Where the employer’s plan is self-funded, the premiums are often treated as taxable income, and they are sometimes gross-up for taxes to comply with the non-discrimination rules under Internal Revenue Code § 105(h).
