Johnson Price Sprinkle PA (JPS) identifies health insurance premium reimbursements which may allow relief for small employers. On December 6, 2016, the Senate followed the House of Representatives and passed the 21st Century Cures Bill. Section 18001 of that legislation will now again allow certain small businesses to use qualified health reimbursement arrangements to pay for an employee’s individual policy health insurance premiums, and avoid penalties previously imposed by the Affordable Care Act (ACA).
The ACA had previously considered such arrangements to be improper group health plans, subject to ACA market reforms, which include the prohibition on annual limits for essential health benefits and the requirement to provide preventive care with no employee cost sharing. Excise taxes of $100 per individual per day could be imposed for any reimbursement arrangement not meeting the reform standards.
The legislation does place some limits on the reimbursement arrangements. Those limits include:
– A cap of $4,950 for single premium plans ($10,000 for family)
– The employee must provide proof that the coverage being reimbursed is minimum essential coverage under the ACA definitions
– The employer providing reimbursement cannot be an applicable large employer under ACA standards
– The employer cannot offer a group health plan to any of its employees
The relief in the Bill applies to years beginning after December 31, 2016. Further transitional relief that was provided earlier for such plans (which had expired on June 30, 2015) will be treated as applying to any plan year beginning on or before December 31, 2016.
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For more information or to determine how this new legislation could benefit
your small business, contact JPS.
Asheville Boone Marion
828-254-2374 828-262-0997 828-652-7044