How about employers that want to give employees $$ to go out and buy their own Health Insurance, not so fast!

In the old days…like 4-5 years ago, employers would routinely just give employees money to purchase their own Individual-Family plans on the internet, or through an Independent Broker.  Other employers would “reimburse” employees for their health insurance expenses.  Many companies would claim that money paid as a “business expense”, or even pre-tax the money.  These were sometimes called an “Employer Payment Plan”.  With the #ACA and the retooling of #ObamaCare, in 2014, the IRS disallowed these type of arrangements, and got pretty mean about it.

IRS notice 2013-54 clearly states employers cannot reimburse or pay for Individual Health Plans for people

Now that I’ve said that…..there are some exceptions.  When an employer purchases an ACA compliant #GroupHealthPlan and then sets up a legitimate Health Reimbursement Arrangement, or #HRA, then it can work.  The IRS has accessed penalties for companies to the tune of $36,000 per employee for each violation of the 2013 law.  Its nothing to mess with.  I still get calls from smaller employers that don’t want the hassle of having to be responsible to set up a legit Group Health Insurance plan for the employees, and come up with this idea on their own.  I politely point them to the IRS website and suggest they consult with their #CPA.  Here is a good article on the subject:   https://www.swlaw.com/blog/employee-benefits/2014/06/11/the-irs-meant-what-it-said-in-notice-2013-54-employers-who-pay-for-individual-health-insurance-policies-for-employees-on-a-pre-tax-basis-face-massive-penalties/

An ACA compliant Employee Benefit plan has massive benefits for recruiting and retaining

First of all….Employee Benefits are expensive, there’s no getting around that.  There ARE some creative ways to make them less expensive, if you want to be creative.  Find yourself an Independent Employee Benefits Broker that you trust and have them guide you through the process.  We are in the Bay Area and the competition for talent in most industries is insane.  Employee Benefits and Group Health Insurance is the #2 question potential hires ask about…..right underneath salary.

Employers don’t realize that the company contribution does not have to be a lot

The minimum contribution for a company to offer #GroupBenefits to their employees can be as low as $100 a month, or 50% of the solo employee premium on the cheapest plan offered.  To give you an example, a company with 10 employees enrolling into a Kaiser plan, could be as low as $1000 a month for the employer, even less if some employees don’t enroll.

Do your due diligence and find a good Benefits Broker.  Stalk them on LinkedIn, FaceBook, Yelp, etc…you’ll be surprised what you find.

Steve Brauer, Principal, Brauer Insurance Services LLC, (877) 421-4325   www.brauerinsurance.com

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