As more and more small employers adopting strategies reimbursement of health insurance (aka redemption premium arrangements ), a common issue for employers and advisers is on the line - that the laws, regulations and tax codes allow employers to pay health insurance without the employees tax?
The answer is that there are seven key rules that allow, and form, the insurance reimbursement disease today.
chronological Compliance
Here is a timeline of health insurance respect of repayment from 1954 to today.
To view a high resolution image or download the PDF here
1954 :. Section 105 added to the Internal Revenue Code
In 1954 Article 105 was added to the Internal Revenue Code ( IRC). IRC Section 105 allows an employer to offer a plan to pay qualified medical expenses of employees, including insurance premiums. Under Article 105, the amounts received are excluded from employee income
1961 :. Revenue Decision 61-146
In 1961, 61 -146 Income Decision was issued for an employer to pay or reimburse the medical expenses of an employee tax free, under IRC Section 106. income 61-146 decision paved the way for Plans employer payment , where an employer pays directly or reimbursed directly for insurance premiums disease.
1974: Security Act of retirement income employees (ERISA)
In 1974, ERISA was created. ERISA implemented the fair and equitable treatment requirements for benefit plans for employees, including the requirement of official documents of the regime. . Today, all repayment plans of formal health insurance must comply with ERISA laws
1996 Health Act on Liability (HIPAA) Insurance Portability and
In 1996, HIPAA Privacy Law was created. HIPAA protects medically employees private health information. . Today, all of the formal health insurance reimbursement plans must comply with HIPAA privacy rules
02: Notice 02-45, health reimbursement arrangements
In 02, the IRS issued Notice 02-45 which confirmed an employer may offer a plan to pay qualified medical expenses of employees, including insurance premiums. The planned review of the rules and guidelines for health reimbursement arrangements (HRA), including the tax treatment, the benefits and coverage under an HRA
2010: . Affordable Care Act (ACA)
In 2010, the ACA was signed into law. Among other things, the ACA requires group health plans (including health insurance reimbursement plans) to comply with the new requirements effective 2014.
2013: 2013-54 reviews
in 2013, the IRS and the Department of Labor released the 2013-54 opinion which confirmed that all group health plans, including reimbursement of health insurance plans can not impose limits on essential health benefits and should cover basic preventive health care services without cost sharing.
The review confirmed that the employer payment plans and certain types of CRH will not comply with the ACA market reforms from 1 January 2014. If the employer uses an Agreement redemption that fails to comply with market reforms, the employer may be subject to a fee of $ 100 / day per employee excise applicable. Sanctions begin on July 1, 2015.
To avoid penalties, employers reimburse employees for health insurance should take a repayment plan in line, like a Healthcare repayment Plan (HRP).
For more information on how HRPS ZaneHealth such as respect, see compliance schedule PDF (click here) .
Conclusion
Since 1954, there have been a series of laws, tax codes and reforms impacting how employers can reimburse employees for health insurance. Remember, a repayment plan of health insurance is considered a group health plan and, as such, must comply with all rules and guidelines, including IRS, ERISA, HIPAA, and the rules of the ACA. Employers can use a consistent HRP as ZaneHealth to reimburse employees for individual health insurance
Related :. compliance requirements for arrangements redemption premium
do you have any questions about compliance and health insurance reimbursement? Leave a comment below and we'll help you answer.
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