Can a Small Business Provide Health Insurance for Employees in Multiple States?
I am Secretary/Treasurer of a small nonprofit. I have three employees in three states. In the past I have paid (directly to the provider) 100 percent of the cost of each employees health insurance. The employee identified the insurer, who was then compensated directly for the full cost of the employees coverage, directly from our corporate account. I am told this is no longer legal but I have no idea how to provide my employees with coverage as they are each in a different state.
If a business has operations in multiple states. As long as your nonprofit qualifies for the SHOP marketplace, you can choose between two different approaches using the Marketplace (and still pay 100% of employee's premium, SHOP eligibility is based on employer size, you don't have to take the tax credits or be eligible for them to use the SHOP):
1. You can choose a single health plan with a multi-state or national provider network. You would then offer this same plan to your employees in all of your different locations, but you would create your SHOP market account in the state where your primary business site is located.
2. You can create a SHOP marketplace account in each state in which you have employees. This would allow you to create different offerings for each employee.
To your above situation about employer healthcare arrangements outside of the SHOP. As best as we can understand you can continue to reimburse an employees for an individual health plan, as so long as that plan counts as minimum essential coverage. This is due to under the updated rules by the Department of Labor Technical Release No. 2013-03 for Section 105 Medical Reimbursement Plans (e.g. a Health Reimbursement Arrangement) and the Sept. 13, 2013, the IRS issued Notice 2013-54. There are some changes worth noting, but you should find everything you need to make a choice in Notice 2013-54.
If anyone has something to add, or clarification please feel free to comment below.