under the affordable care Act, there are new employee reimbursement rules for individual health insurance. And starting today, employers using Shot employer payment or nonconforming penalty repayment plan of penalties of up to $ 100 per day per employee .
The penalties are stiff; up to $ 36,500 per employee per year. What is not mentioned, however, that there is a consistent way to go on the repayment of health insurance. This article provides a summary of new sanctions from today and how an employer can avoid fees.
What are the new rules?
To understand the penalties, it is important to understand the new rules. Here is a brief summary.
The Affordable Care Act (ACA) has introduced new "market reforms" applicable to all group health plans, including some medical reimbursement plans. Market reforms require all group health plans do not place an annual limit or lifetime on essential health benefits (PHS Act 2711), and cover basic preventative care without cost sharing (PHS Act 2713) .
repayment plans that are consistent with market reforms are still able to pay health insurance premiums tax-free; nothing in the tax code changed makes this possible.
There are, however, several types of plans and arrangements which do not meet the new requirements.
Who will be penalized?
If the company is to assist employees in their health insurance costs in one of the following means, the new sanctions may apply:
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Offering health autonomous arrangement Repayment (HRA), with two or more participants
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Pay for insurance of employees directly to the carrier
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Paying employees directly for health insurance without a formal plan in line
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with a repayment plan that does not meet the requirements of the market reform
If the employer uses a reimbursement arrangement does not meet the market reforms, the employer may be subject to a fee of $ 100 / day per employee excise applicable (see IRC Section 4980D ).
you wonder if you pay employees properly now? See this PDF chart to know
How can we avoid the trouble
Employers may reimburse employees for individual health insurance - .? And avoid costly penalties -. using a formal repayment plan in line
remember - the repayment plan must comply with the Act Affordable Care market reforms, as well as other applicable federal regulations (ERISA, HIPAA, IRS, etc.). Types of repayment plans that generally conform to market reforms include:
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Article 105 health care reimbursement plans (HRPS)
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Stand-alone arrangements health reimbursement (HRA), with one participant
as an alternative to a formal repayment plan, employers can also offer employees an allowance (bonus or increase) to use on health insurance, but this should be treated as taxable income.
Conclusion
penalties for non-compliant repayment terms, as an employer payment plan, starting today. Employers can avoid fees, and continue to reimburse employees for individual health insurance, adopting a Section 105 formal repayment plan (as ZaneHealth) which is consistent with reforms of the ACA market.
What questions do you have about the new employer sanctions of payment scheme, or about how to reimburse employees for individual health insurance? Leave a question below.
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