Will An HRA or Employer Payment Plan Affect Tax Credits on Form 8962?
How can i file ( report ) the form 8962, when my employer contributes to my Obama care premium 50% each month? What do they call this? Policy sharing?
Answer
Employers can contribute to your medical expenses and premiums with certain Employer HealthCare Arrangements including an Health Reimbursement Arrangement (HRA) and employer payment plan (where they pay your premium).
Due to Department of Labor guidelines the information on this page may not be correct (so please don't use the information for anything more than reference until we are able to update). Please see our page on Employer HealthCare Arrangements for details. It seems insurers were having employers contribute to employer payment plans and then having employees get marketplace subsidies. Apparently this was incorrect. Department of Labor QA point out that any type of reimbursement plan is a group health plan, and that fact in-and-of-itself prevents an employee from using tax credits.
Will this affect your 2014 return? We aren't sure what the implications would be. Technically it should actually prevent you from claiming tax credits and would mean owing them back, however there may be some sort of relief for you on this for 2014. We will continue to research this and see if we are missing something.
A Health Reimbursement Arrangement (HRA) doesn't affect premium tax credits, but a Employer Payment plan is excluded from an employee's gross income and affects tax credits in that way (tax credits are based on Modified Adjusted Gross Income).
If your employer contributes to your health insurance through an employer health care arrangement (HRA), you'll still deduct your contribution to your premium (Column C part 2 of the 8962 form). The HRA doesn't disqualify you from receiving tax credits based on your income and shouldn't affect your filing of a 8962 form.
On the same token, healthcare arrangements can't be coupled with individual plans to satisfy Market reforms and therefore employers with over 50 full-time equivalents (FTE) can get into trouble by trying to replace a group plan with an HRA used by employees for Marketplace coverage.
Learn more about HRA rules for employers.
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If you have an HRA in your retirement plan to help off-set medical cost can you also get tax credits when using Obamacare to get insurance?
You can’t get assistance if you are getting employer coverage and contributing to an HRA, this is due to the rule that assistance is for Marketplace plans sold on the individual market and you would be getting an employer plan. With that said, if you have an existing HRA and get a marketplace plan, or if you contribute to an HSA and have a marketplace plan you can get assistance.