The answer to this question
is NO, absolutely not, don’t even think about it, unless you want to face a
$100 per day per employee penalty! New regulations were released by the
Department of Labor on November 6, 2014, and the DOL has now determined that all employer
arrangements that reimburse employees for individual premiums violates the
ACA's market reforms. These new regulations apply regardless of whether the
employer treats the money as pre-tax or post-tax for the employee, making this
practice no longer allowed.
BASE® and our legal team
believe that while this is a departure from the previous guidance, it requires
immediate action. While it is unfortunate that an employer can’t help
their employees with the cost of their individually purchased health insurance
premiums, even on a post-tax basis, BASE® will no longer administer the Choice
Incentive Plan. BASE® believes in keeping our clients in compliance, and
will discontinue the offering of the BASE® Choice Incentive Plan. This
plan has now been deemed a form of group health coverage according to these latest
regulations, and we believe that it is in our client’s best interest to avoid
triggering excise tax penalties from an audit.
The only option that is
currently viable for employers to assist their employees is for an employer to
offer increases in compensation that is not tied to the purchase of
insurance. Additionally, these requirements still only apply to plans
with more than 1 employee (exempting the BASE® 105 HRA) and with respect to reimbursement of individual market health insurance
policies, not supplemental excepted benefit health insurance policies or life
While we are no longer able
to offer the BASE® Choice Incentive Plan, BASE® still has a host of other
viable product offerings, which include the BASE® Section 105 HRA for the
self-employed, BASE® Integrated HRA, BASE® 125 Cafeteria Plan (FSA, DCAP, POP),
and the Excepted Benefits HRA and 125 plans.
Please call 1-888-386-9680
with any questions regarding this information.
BASE® - Director of Marketing & Communications