Short answer: Yes, partly. The cost of employer-paid group term life coverage above $50,000 is ‘imputed income’, a taxable amount (based on an IRS age-based table) added to the employee’s wages, even though the employee doesn’t receive cash.
Under IRS rules, the first $50,000 of employer-paid group term life insurance is a tax-free benefit. For coverage above $50,000, the IRS assigns a value using its ‘Table I’ rates (based on the employee’s age), and that imputed value is added to the employee’s taxable wages and shown on the W-2; subject to Social Security and Medicare taxes. Employees don’t pay out of pocket, but they’re taxed on the value of the excess coverage. Employee-paid (voluntary) life and amounts at or under $50,000 don’t create imputed income.