Employer Payment Plans for Employees' Health Insurance

MN Health Staff Writer | May 11, 2015

New IRS Guidance has been released that will dramatically change the way small businesses help their employees pay for health insurance. IRS Notice 2015-17 states that employers who offer employees reimbursements or pay premiums for employees' individual health insurance plans will be subject to a $100 per day per employee excise tax. The interpretation from the IRS is that any reimbursement or payment for employees' individual plans is actually a group health insurance plan, and because the payment is a group plan, it does not meet Affordable Care Act requirements for health insurance plans. Enforcement of this notice will go into effect July 1, 2015.