Is disability insurance premium allowed as a pretax deduction in Ohio?

The pretaxing of disability premiums is a decision made by employers when setting up Section 125 benefit plans. There are three possible configurations: pretax only, after tax only, or employee chooses.

When the premium is paid pre-tax the benefit becomes taxable when an employee is disabled. The employer and employee would both have a FICA or payroll tax obligation for the benefit paid. The insurance company may issue a 1099 statement for the benefits.

There is no Ohio law changing the IRS guidelines on this topic that I am aware of.