According to the IRS Code, "de minimis fringe" benefits are excluded from the employee's gross income and deductible by the employer. These benefits include compensation other than wages, tips, and salaries; such as health insurance, life insurance, and pension plans.

(from MSN.com) In some cases, your tax-free fringe benefit amount may be limited. For instance, the cost of $50,000 of life insurance is a tax-free fringe benefit. However, if your employer pays for more than $50,000 of life insurance for you, your employer must include the cost of providing the excess life insurance with your income on your Form W-2.