Is your company in compliance with the Affordable Care Act?

May 28, 2015

 Time is running out on companies that make payments to employees in lieu of providing a healthcare plan.

From the website.

Employer Health Care Arrangements

Q1.  What are the consequences to the employer if the employer does not establish a health insurance plan for its own employees, but reimburses those employees for premiums they pay for health insurance (either through a qualified health plan in the Marketplace or outside the Marketplace)?

Under IRS Notice 2013-54, such arrangements are described as employer payment plans. 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. As explained in Notice 2013-54, these employer payment plans are considered to be group health plans subject to the market reforms, including the prohibition on annual limits for essential health benefits and the requirement to provide certain preventive care without cost sharing.  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 and may be subject to a $100/day excise tax per applicable employee (which is $36,500 per year, per employee) under section 4980D of the Internal Revenue Code.

See all FAQ's on the Affordable Care Act at:

About the Author

Jimís Bio

Jim is an extremely diversified financial executive with over 23 years of operational, corporate and non-profit financial experience. He has overseen the finances of the entire United States in management services for facilities in the K-12 Market for Sodexo. Jim was the CFO and later elevated to the CEO position for the Battleship New Jersey Museum and Memorial in Camden, NJ. a non-profit, 501 (c)(3) organization. In addition, as a consultant working with Comcast-Spectacor Charities (nationally known as The Flyers Wives Charities), Jim reorganized the financial role and provided strategic and operational expertise to the organization. This led to his future role as VP and Corporate Controller for Comcast-Spectacor, (owner of the Philadelphia Flyers) and over $500M of annual ancillary sales from its other entities in the entertainment industry. He also had extensive background with finance and operations in the restaurant industry.

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