Can I Use My HRA to Pay For Marketplace Coverage?
Can I use an hra to pay for my marketplace insurance. I am retired and would qualify for a subsidy. Will be 60 in 2016. I need to know.
Answer
You can use a HRA to pay for health premiums, but an employer can't fund a HRA to reimburse individual coverage. This means if you already have money in a HRA you can use it to pay for your premium costs. This is explained in more detail at Zanebenefits.com. Please note this is an interpretation of the law and the DOL guidelines. We don't offer professional tax advice, so you may want to seek an expert opinion.
UPDATE: Given the confusion over section 105 plans we strongly suggest reading our breakdown here.
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Since healthcare premiums are raising on average 25-35% is there any chance that we can use the HSA savings accounts to help pay for premiums without being penalized by IRS?
Can employers contribute to those plans Tax Free up to limit amount?
THIS WOULD MAKE A HUGE IMPACT IN MILLIONS OF POCKET BOOKS IN MIDDLE INCOME BRACKET TO HELP ALLEVIATE THE SPIKE BY OFF-SETTING POST-TAX CONTRIBUTIONS!!!!!
Thank you!
Still confused. Here’s my situation. Church has only one employee which is the pastor. Historically the pastor buys his own individual health insurance policy from a local insurance agent. The church then reimburses him for his premiums. We treated this as nontaxable to him in the Pre-Obamacare days and continued to follow this practice after Obamacare was passed under the “one employee HRA exception”. But now we have a new fact. The cost of the individual policy has almost doubled in a two year period. Therefore, the pastor went to the Marketplace and bought insurance in the Marketplace. Total monthly cost of $2,500; subsidy of $1,100; out of pocket cost the pastor will pay is $1,400. Since we only have one employee, can the church still reimburse the $1,400 monthly out of pocket cost to the pastor on a NONTAXABLE basis? Or, if the church does reimburse the $1,400 per month, how does that affect his advance premium tax credit computation on Form 8962?
Because it is a one person business the “one employee HRA exception” applies. I’m not sure on the other specifics however (I would imagine the HRA can allow for reimbursement, even with the tax credits, but I don’t have an exact answer). Perhaps a reader will have a better idea, but you may want to consult a tax professional or give a call to healthcare.gov or the irs. Good luck with the search, sorry we couldn’t be more helpful.