The Internal Revenue Service (IRS) plans to fine companies $36,500 per employee per year

The Internal Revenue Service (IRS) plans to fine companies $36,500 per employee per year if the companies give their workers money to help them buy health insurance plans rather than directly providing health insurance coverage for the workers.


"Under IRS Notice 2013-54, such arrangements are described as employer payment plans," according to a Q+A posted to the IRS website. "An employer payment plan, as the term is used in this notice, generally does not include an arrangement under which an employee may have an after-tax amount applied toward health coverage or take that amount in cash compensation."


Note the terminology: "after-tax amount." The IRS doesn't like after-tax amounts being applied to things.


"Notice 2013-54 clarifies that such arrangements cannot be integrated with individual policies to satisfy the market reforms. Consequently, such an arrangement fails to satisfy the market reforms," according to the IRS.


Obamacare's employer mandate penalty, a $100 per day excise tax that comes out to $36,500 per employee per year, applies to companies that do not provide health coverage for their workers. Companies that give money to workers to buy their own plans, we now know, also count as Obamacare delinquents.


So if you're an employer with more than 50 employees, make sure not to give your workers any money to help them buy private insurance plans that might be cheaper than Obamacare plans. You'll be fined if you do.


http://dailycaller.com/2014/05/27/obamacare-to-fine-companies-that-give-workers-money-to-buy-their-own-health-insurance-plans/#ixzz32y1NHdcj

http://www.zanebenefits.com/blog/bid/153069/Why-Businesses-Should-Never-Pay-Individual-Health-Insurance-Premiums

Federal regulations prohibit businesses from paying directly for employee's individual health insurance premiums, outside of an HRA (Health Reimbursement Arrangement), or other IRS/HIPAA/ERISA-qualified tax-free vehicle (e.g. Section 125).
Employer Payment of Individual Health Insurance

Some businesses might want to pay directly for an employee's individual health insurance plans without utilizing an ERISA and HIPAA-compliant HRA, but doing so may put the business out of compliance with federal regulations and may increase the business's (and employee's) tax liability.

There are two major reasons an employer should never pay for its employees' individual health insurance plans directly:

Paying for Individual Health Insurance without an qualified HRA Causes the Employer to "Endorse" the Individual Health Insurance Plans

Paying for Individual Health Insurance without an HRA Causes the Payments to Become Taxable Income to the Employees

When an employer pays directly for an individual health insurance plan, they effectively endorse each employee's individual insurance plan as part of an employer-sponsored group health benefit offering. In other words, according to federal law, the employer is treating the individual plan as part of an employee welfare benefit plan regulated by ERISA. Because most individual health insurance plans do not meet minimum ERISA group plan requirements, the employer is out of compliance.

Separately, an employer is not allowed to know the details of employees HIPAA-protected medical expenses. Because most individual health insurance costs are based on an employee's health, the health insurance details must be HIPAA protected. When an employer pays for the individual policy, they can violate HIPAA-privacy requirements because they know the details of a HIPAA-protected employee expense.

The federal government has guidelines for employers who want to contribute to employee's individual health insurance premiums without violating the HIPAA and ERISA regulations. An ERISA and HIPAA-compliant HRA will ensure compliance with federal law.

Furthermore, if an employer were able to technically comply with HIPAA and ERISA in paying for individual health insurance premiums, such payments would be taxable income to employees unless they were reimbursed through an HRA or other IRS-qualified tax-free vehicle. Using an HRA an employer can give employees effectively up to twice as much in health benefits through tax savings than if the employee were to pay for such expenses themselves.The IRS requires that legal plan documents be established in order for employees to deduct the individual health insurance premiums from taxable income on the annual W-2.

An IRS-compliant HRA will ensure the tax deductibility of employee's individual health insurance premiums.

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(Setting up a Health Retirement Account meeting IRS guidelines WOULD ALLOW employers to contribute to employees' accounts without either the business or the individual incurring tax liability).

All the more reason to have large families and not hire anyone outside the family unless absolutely necessary. That way the workers are all covered under the family health care policy.

*****CHUCKLE*****

https://www.youtube.com/watch?v=xd0TGfZSACI

  

This last sentence is down right idiotic:

So if you're an employer with more than 50 employees, make sure not to give your workers any money to help them buy private insurance plans that might be cheaper than Obamacare plans. You'll be fined if you do

All plans being sold are aka obamacare plans, I've read this shit for the past week.

It's always been illegal regardless of what size group to pay for any part of an individual plan for an employee. All individual's had to attest to it on their applications since I've been in the business. But I don't agree with it and the practice has been widely used for years. I think if an employer wants to give money to an employee to purchase health insurance they sure the hell should be able to.

ppaca wrote:This last sentence is down right idiotic:

So if you're an employer with more than 50 employees, make sure not to give your workers any money to help them buy private insurance plans that might be cheaper than Obamacare plans. You'll be fined if you do

All plans being sold are aka obamacare plans, I've read this shit for the past week.

It's always been illegal regardless of what size group  to pay for any part of an individual plan for an employee. All individual's had to attest to it on their applications since I've been in the business.  But I don't agree with it and the practice has been widely used for years. I think if an employer wants to give money to an employee to purchase health insurance they sure the hell should be able to.

Read it again. I think you missed the part that explained how an employer COULD set up a plan acceptable to the IRS without violating HIPPA or causing their employees to incur an additional tax liability. Traditionally, employees have saved money by being part of a group health plan at work. Independent contractors had to face much higher rates if they weren't part of a trade group or professional group or other "umbrella" organization. I don't know how many individual policies you've sold, but I think you'd agree that most of them were completely out of the ballpark expensive.

Your ball...  

Floridatexan wrote:

ppaca wrote:This last sentence is down right idiotic:

So if you're an employer with more than 50 employees, make sure not to give your workers any money to help them buy private insurance plans that might be cheaper than Obamacare plans. You'll be fined if you do

All plans being sold are aka obamacare plans, I've read this shit for the past week.

It's always been illegal regardless of what size group  to pay for any part of an individual plan for an employee. All individual's had to attest to it on their applications since I've been in the business.  But I don't agree with it and the practice has been widely used for years. I think if an employer wants to give money to an employee to purchase health insurance they sure the hell should be able to.

Read it again.  I think you missed the part that explained how an employer COULD set up a plan acceptable to the IRS without violating HIPPA or causing their employees to incur an additional tax liability.  Traditionally, employees have saved money by being part of a group health plan at work.  Independent contractors had to face much higher rates if they weren't part of a trade group or professional group or other "umbrella" organization.  I don't know how many individual policies you've sold, but I think you'd agree that most of them were completely out of the ballpark expensive.
Your ball...

Does anyone recognize how insane that is?  That the IRS, the Internal Revenue Service, must decide what sort of compensation are agreed upon between a employer and employee.

First off forget what Zane benefits have said, they will be in trouble before 2016. You cannot use pre tax dollar's to give employee's to purchase their own insurance PERIOD. You can give the employee a raise to purchase his/her own insurance but you cannot make them purchase the insurance with the raise. Regardless if a big employer sends his/her employee's to the exchange without pre-tax dollar's the employer would still have a penalty for not providing group health benefits.

What Zane is trying to do is illegal, and will get an employer in deep shit fast.

I think the idea of an average joe building a large biz will soon be totally prohibitive... then soon after a forgotten idea.

Unless of course it dovetails with govt policies/ideology and has collusion amongst the layers of bureaucracy and agencies.

Yea team..!! Cas sunstein wrote a detailed book in the use of govt intervention... tho he neglected to call it what it really is:

Fascism.

Well you're probably right on that at least for 50-99, I have one I write individuals on a few because it's cheaper than putting them in the group, not because the employee's are sick. I will have to tell them around Sept they have to cancel all those and put them on the group. What I thought, but apparently was wrong, were these delays in the group mandate's would lead to it dying. It seemed to be apparent Obama wanted everyone in the exchange's, but I guess not.

It's amazing when new rules are posted on the other forum because certain things that were allowed, now all of a sudden have changed in mid year, leaving a whole bunch of people open for lawsuits. One thing I may have told a person to be fact in February and it was, may not be fact today and makes me out a liar.

But this HRA has been questionable since last Oct 1 and the 29 year old cocky President of Zane befefits thinks he can override the IRS, but in fact any employer he has put into these arrangement's will be open to hefty fines 2016.