@BigBillyBob - see page 18. bottom left
https://www.irs.gov/pub/irs-pdf/p525.pdf
"In most cases, you must report as income any amount you receive for personal injury or sickness through an accident or health plan that is paid for by your employer. If both you and your employer pay for the plan, only the amount you receive that is due to your employer's payments is reported as income".
While the payments you are receiving are part of the benefit package and not necessarily from an accident or health plan, I think the same logic can be applied. Since the payments are coming from the employer, the income is taxable. I assume you are not paying for these "time off benefits" (vacation, sick leave, PTO, etc.)
