I received $1,000 from my employer in lieu of taking company health coverage. Since this was not for work performed, do I have to report this as income?

Individual retirement account (IRA)

A retirement account to which up to $4,000 (or $5,000 if you are 50 or over) may be contributed for 2007, but deductions for the contribution are restricted if you are covered by a company retirement plan. Earnings accumulate tax free.