Are funds from health insurance for groceries taxable income?

[johnsonr]

As confirmed by Shall I report Member Rewards incentive payments from my health insurance for choosing a certain med..., I realize that "Medical Rewards" incentive payments from health insurance [for things like learning about the "Medical Rewards" program, getting a (paid-for-by-insurance) annual physical exam, etc.] *are* taxable as "Other Income".

However, I imagine that funds made available (by debit card, 1 time) by the insurance company to help pay for groceries, utilities, and transportation are *not* taxable as income.

Is that correct?

[Anonymous_]

@Critter-3?

[Critter-3 · Accepted solution]

My thoughts are they are non taxable unless a 1099 is issued for the distribution.  I believe it could be considered as a rebate(incentives ) of the insurance premiums  which would make it non taxable but you also have to reduce your deductible medical expenses by that same amount on the Sch A.  

[johnsonr]

Thanks @Critter-3.

I now realize that I should have mentioned:
1. This wasn't an incentive for doing anything. It was in 2022, and I think was intended as Covid and/or inflation relief
2. It was on a Medicare Advantage plan
3. Schedule A doesn't apply, because I'm using the standard deduction

So your initial thoughts ("non taxable unless a 1099 is issued for the distribution") seem appropriate.