What is the tax implication for employer-paid qualified long-term care insurance premiums?

The correct answer reflects the tax treatment of employer-paid qualified long-term care insurance premiums. When an employer pays for long-term care insurance on behalf of an employee, those premiums are typically excluded from the employee's gross income. This means that the employee does not have to pay income tax on the value of the premiums paid by the employer, which can result in significant tax savings for the employee.

This exclusion is important as it encourages both employers and employees to consider long-term care insurance as part of their benefits package without adding a tax burden on the employee. By classifying these premiums in this manner, it promotes employee welfare and financial planning for long-term care needs without penalizing employees financially.

Understanding this tax implication is crucial for both employers considering offering such benefits and employees evaluating the value of their benefit package. The other choices do not accurately reflect how qualified long-term care insurance premiums are treated under tax law.