The new law does not allow companies to reimburse an employee for Individual Plans, but does new law prohibit the practice of employers reimbursing employees who has coverage through a spouse, Medicare, VA?


Employers can only reimburse group health plans except in very specific instances (such as if they have one employee). Employers can't reimburse pre-taxed plans, so this almost always excludes spouse plans and can't reimburse VA plans (although there are specific employer tax benefits for hiring).

The bottomline: If it's not an group health plan offered by an employer, an employer can't typically offer an HRA.

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B Davis on

If a large employer (greater than 50) offers group health insurance which the employer pays for entire cost (silver package) and over 95% of the employees enroll and meets the mandate, can the employer still reimburse a couple of employees, who are deemed to be highly compensated employees (HCE)for monthly costs of the premiums who have pre- existing individual health insurance policy (silver or gold) prior to the A.C.A. and do not receive any subsidized plans from the marketplace (California) ???????? on

So generally no, an employer can’t reimburse for individual coverage. That is your basic advice. Like if you ask your doctor can you go on a ski trip if sick, generally they advise against it. With this in mind, there is a school of thought that says you can offer benefits in a roundabout way by structuring a section 105 plan just the right way. There are also certain exemptions. But this is the sort of stuff that you should probably be running by an expert, as it gets heady and the fees for getting it wrong are harsh. Just google “Section 105 plans ObamaCare” and realizing that Zane benefits is the one who sells the plan, read the articles on the front page.

Renee on

I have work for my Employer for 16 plus years I am the only non-union employee they agreed when I was hired that they would pay my Kaiser health insurance costs that I have been a plan member for since I was 5 yrs. old and My guides lines would mimic the bylaws that are for shop Iron workers union.. I’m on the gold plan with Kaiser now ( that is what I was told I had to do to be for the Obamacare program) now i’m told that not only I can be taxed on it, but my employer can’t claim it as a cost expense.. I need to know if there is a issue or not since the plan is billed to me and payment by a company check?
Please advise as soon as possible

Judy L Cross on

I am currently reimbursed by my Employer for Health Insurance (BCBS of MN & Medicare). I had the option of being reimbursed or going on the Company Insurance Plan which is not nearly as good as what I have. My husband is very ill and we have extremely high medical bills, all of which are covered under the current situation. If I have to take the Company Insurance we will go broke. Do you have any suggestions?

Laura on

Can a company with 50 – 100 employees, who provides an affordable plan, pay all of the health insurance premiums for a single employee as an extra benefit? Everybody else would still be required to pay their portion of the premiums. on

You must go about this very carefully, and I wouldn’t do it without the tax advice. If you want to write off the extra benefit as a health benefit you need to use a sect. 105 plan or some other vehicles. This has been an ongoing complication, but there are a few answers kicking around.

Camilla on

My small business employer (less than 15 employees) provided us with full premium coverage even before the Obamacare was passed, he paid it monthly using a company credit card. When the Obamacare passed, he asked us to enroll and see if we can get any credit. I ended up with $91 credit after enrolling so instead of my premium being $341.94, it went down to $254.23 so this way it saved him money. He then added the amount of $254.23 directly into our paychecks but he just classified it as “other” not benefit or healthplan. Well, came tax season, when I calculated my income tax, it showed instead of my typical refund, I ended up owing $323 and paying back all the credits I received. So clearly, by him adding the health insurance as if that’s extra pay, made it look like I made way more money than I actually did. He obviously is not willing to give me back the credit, but at the same time he did not explain to us exactly what was going on. So my question is, is he doing the right thing, is that legal? He took our credit, and this is not through a group plan. How can I make him change the way he pays us so I don’t get taxed for the money that 100% gets drafted by Blue Cross out of my account every month and that is supposed to be a benefit by working for him. Should I call the IRS? I couldn’t find any answer to this question anywhere.