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I am helping a small business owner who is disbanding, and wants to make up the employer contribution legally. So far, I have been told the only way is to give employees a raise roughly equivalent to the employer contribution amount.
Now I see this article: Labor and Employment Alert: Agency Guidance on Health Plan Strategies that Don
The rest of the title is "Don't Work as Advertised"
The question is, does the employee raise equal "reimbursement" by the employer for health plan cost. The last sentence below is a clue, stating: if payments are tied to employees enrolling in insurance. So if the employer pays the raise whether or not the employee buys insurance, maybe that works.
"NO EMPLOYER PAYMENTS FOR INDIVIDUAL HEALTH INSURANCE
Newly published DOL FAQs XXII (November 6, 2014) clearly state that an employer cannot reimburse an employee for individual health insurance premiums even if the employer treats the reimbursement as taxable. The reimbursements are treated as an employer payment plan regardless of whether the employer treats the payments as non-taxable or taxable. An employer payment plan violates the ACA prohibition on dollar limits and could subject the plan sponsor to penalties of $100 per day ($36,500 per year) per affected participant. Any arrangement where employer payments are tied to an employee’s enrollment in individual health insurance should be reevaluated in light of these FAQs."
Now I see this article: Labor and Employment Alert: Agency Guidance on Health Plan Strategies that Don
The rest of the title is "Don't Work as Advertised"
The question is, does the employee raise equal "reimbursement" by the employer for health plan cost. The last sentence below is a clue, stating: if payments are tied to employees enrolling in insurance. So if the employer pays the raise whether or not the employee buys insurance, maybe that works.
"NO EMPLOYER PAYMENTS FOR INDIVIDUAL HEALTH INSURANCE
Newly published DOL FAQs XXII (November 6, 2014) clearly state that an employer cannot reimburse an employee for individual health insurance premiums even if the employer treats the reimbursement as taxable. The reimbursements are treated as an employer payment plan regardless of whether the employer treats the payments as non-taxable or taxable. An employer payment plan violates the ACA prohibition on dollar limits and could subject the plan sponsor to penalties of $100 per day ($36,500 per year) per affected participant. Any arrangement where employer payments are tied to an employee’s enrollment in individual health insurance should be reevaluated in light of these FAQs."
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