Employer Payment Plans for Employees' Health Insurance

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.