Employer Reimbursements for Individual Premiums
Is this practice allowed?
In
the past, some employers have reimbursed employees for the cost of medical
insurance the employees purchased through the individual market. The
reimbursements were made pretax. In this way, the employer sought to provide
health coverage to their employees without establishing a group health
plan.
Is this still allowed under the Affordable Care Act?
No! As of January 1, 2014, this practice is no longer permitted.
We strongly advise that you contact your employee benefits advisor or us with any questions or concerns you may have with this change!
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