In serving 36,000 employers and 5 million employees, our UBA Partners get this question frequently: What federal guidance prohibits employers from reimbursing individual health insurance policies?
Posted by: Danielle Capilla May 10, 2016 9:00:00 AM
In serving 36,000 employers and 5 million employees, our UBA Partners get this question frequently: What federal guidance prohibits employers from reimbursing individual health insurance policies?
Topics: ACA, PPACA, employer payment plans, premium reimbursement, Danielle Capilla, individual health plans
Posted by: Linda Rowings Mar 17, 2015 11:00:00 AM
On February 18, 2015, the Internal Revenue Service (IRS) issued Notice 2015-17. This Notice addresses employer payment or reimbursement of individual premiums in light of the requirements of the Patient Protection and Affordable Care Act (PPACA). For many years, employers were permitted to reimburse premiums paid for individual coverage on a tax-favored basis, and many smaller employers adopted this type of an arrangement instead of sponsoring a group health plan. However, these “employer payment plans” frequently are unable to meet all of the PPACA requirements that took effect in 2014, and in a series of Notices and frequently asked questions (FAQs) the IRS has made it clear that an employer may not either directly pay premiums for individual policies or reimburse employees for individual premiums on either an after-tax or pre-tax basis. This is the case whether payment or reimbursement is done through a health reimbursement arrangement (HRA), a Section 125 plan, a Section 105 plan, or another mechanism.
Topics: ACA, PPACA, IRS, employer payment plans, Medicare Part B, premium reimbursement, Medigap, Medicare Part D, two-percent shareholder, TRICARE
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