• filter:
  • Page :
  • 1
  • Text Only
  • Search this Topic »
Voting History
rated:
The topic (short excerpt below from Journal of Accountancy's online article) can be read here: †http://www.journalofaccountancy.com/issues/2017/mar/congress-enacts-law-allowing-hras-under-aca.html

"Congress authorizes new small business HRAs. † Popular employer arrangements to reimburse medical expenses had been penalized by the Affordable Care Act.†

"The 21st Century Cures Act, P.L. 114-255, reinstated the ability of certain small businesses to use health reimbursement arrangements (HRAs) and employer payment plans without incurring penalties under the Patient Protection and Affordable Care Act (PPACA), P.L. 111-148.

The Cures Act amended Sec. 9831 to add an exception from the penalty rules for qualified small employer HRAs

In Notices†2013-54†and†2015-17, the IRS had concluded that, because they impose an annual limit on the dollar value of health benefits for particular individuals, HRAs and employer payment plans are group health plans (if they have at least two participants who are current employees) that fail to comply with the market reforms that apply to group health plans under PPACA and are therefore subject to the excise tax in Sec. 4980D (for more, see "Tax Practice Corner: Health Reform Prohibits Most Reimbursement Plans,†"†JofA, Sept. 2015). Sec. 4980D imposes an excise tax of $100 per day per affected participant on health insurance employer payment plans that do not comply with the market†reforms."

Member Summary
Staff Summary
Thanks for visiting FatWallet.com. Join for free to remove this ad.

rated:
Doesn't this mean that you have to share every intimate detail of every procedure of every family member with your boss (or HR department at least)?† That would be a total deal breaker for me anyway.

rated:
skarydrunkguy said:   Doesn't this mean that you have to share every intimate detail of every procedure of every family member with your boss (or HR department at least)?† That would be a total deal breaker for me anyway.
The way we handled this before 2014 and will start doing again is to have each employee provide a sealed envelope with copies of medical expenses, a spreadsheet with amounts only on it and a statement that the expenses submitted are deductible and haven't been reimbursed. If we were to get audited and the contents of the envelope didn't match the spreadsheet, it would cost the employee far more money due to the loss of bonus than any amount that he or she could ever hope to fraudulently claim. I trust my employees and I don't believe any of them would try to cheat me by submitting false claims.

rated:
skarydrunkguy said:   Doesn't this mean that you have to share every intimate detail of every procedure of every family member with your boss (or HR department at least)?† That would be a total deal breaker for me anyway.
††
† The HRA can be applied to insurance premiums, so all you need to do is give your employer an invoice from insurer.
Essentially this allows the money to be tax-exempt,


See†https://www.zanebenefits.com/small-business-hra
https://www.shrm.org/resourcesandtools/hr-topics/benefits/pages/...

rated:
Very good topic - thanks OP.

I am trying to understand the article. Many small businesses with owner-employees only have a s-corp health insurance premium reimbursement plan. The premiums are paid by the employee and the s-corp provides reimbursement. This reimbursement appears on W2 in box14.
Are you saying that the business can establish an HRA in this case?
What kind of expenses can be reimbursed? (Obviously not the premiums since they are reimbursed separately)
Prescription medicines? Doctor visits?

rated:
My employer uses an HRA to reduce our insurance company's deductible. Essentially the rather small company self insures a coupe thousand in potential liability per employee.

However, they use a TPA to ensure privacy.

rated:
Upon further research, it seems for owner-employers, the HRA reimbursements are taxable income but it still offers advantages
1) It is exempt from FUTA
2) It will reduce your business income (and thereby reduce business income tax if your state taxes it)

However, this article seems to say that S corp shareholders who own more than 2 percent of the company canít participate in HRA.

rated:
ryeny3 said:   skarydrunkguy said:   Doesn't this mean that you have to share every intimate detail of every procedure of every family member with your boss (or HR department at least)?† That would be a total deal breaker for me anyway.
The way we handled this before 2014 and will start doing again is to have each employee provide a sealed envelope with copies of medical expenses, a spreadsheet with amounts only on it and a statement that the expenses submitted are deductible and haven't been reimbursed. .

That doesn't sound sketchy at all...

rated:
Some employers require employees to submit EOBs. Not crazy about that.

  • Quick Reply:  Have something quick to contribute? Just reply below and you're done! hide Quick Reply
     
    Click here for full-featured reply.


Disclaimer: By providing links to other sites, FatWallet.com does not guarantee, approve or endorse the information or products available at these sites, nor does a link indicate any association with or endorsement by the linked site to FatWallet.com.

Thanks for visiting FatWallet.com. Join for free to remove this ad.

While FatWallet makes every effort to post correct information, offers are subject to change without notice.
Some exclusions may apply based upon merchant policies.
© 1999-2017