Under the Affordable Care Act ( "Obamacare"), the tax subsidies for health insurance are available for the majority of individuals and families who do not get insurance through an employer. If an employer offers a minimum level of coverage, employees are disqualified subsidies.
So what about employees who are offered a Section 105 health reimbursement Plan (HRP)? participants in an HRP also excludes subsidies? This article provides an overview of how subsidies federal Medicare work in tandem with HRP.
How Impacts Health Plan Employer Eligibility for grants
If an employee has an employer offers health coverage the plan meets certain standards (there is a "plan sponsored by the eligible employer"), the employee can not receive a federal grant - even if the employee is not registered in coverage.
However, if the health plan offered by the employer does not meet these standards, the employee is not excluded from accessing grants.
Related - ?. Am I eligible for premium tax credits
Let's examine this closer
Internal Revenue Code § 36B provides that individuals are allowed to access to subsidies for health insurance as long as they are not eligible for other minimum essential coverage. This includes coverage through a plan sponsored by the eligible employer who is also affordable to the employee brings to the minimum.
Under these guidelines, an individual is not considered to provide minimum essential coverage if one of the following circumstances:
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the plan sponsored by the employer are not considered a "right employer sponsored scheme", or
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The cover provided is not affordable, or
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The cover does not provide minimum value.
When considering a HRP, individuals are allowed to access tax credits because premiums that HRP is not a "plan sponsored by the eligible employer."
what a plan sponsored by eligible employers?
an eligible employee-sponsored plan, as defined by IRC § 5000A, is a government plan or any other plan or coverage on the small or large group market ( "group health insurance").
IRC § 5000A (f) (2)
plan sponsored by the eligible employer
the term "eligible employer plan" in respect of any employee, a health plan group coverage or group health insurance offered by an employer to an employee who is,
(a) a government plan (as defined in section 2791 (d) (8) of the health Service Act public), or
(B) any other plan or coverage offered in the small group or large market within a State.
This term shall include rights acquired health plan referred to in paragraph (1) (D) offered in a group market .
Conclusion
a Section 105 health reimbursement plan (HRP) as ZaneHealth, is not a government plan and do not provide a coverage on the small market or large group within a state. Accordingly, an HRP is not a plan sponsored by the eligible employer and not a minimum essential coverage
For this reason, the HRP participants -. If otherwise eligible - are allowed access to the federal insurance subsidies disease.
Read an example of how to combine subsidies to health insurance and a repayment plan.
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