I have a Medicare-eligible employee who wishes to decline coverage through my company and participate instead in Medicare. Can I pay this employee’s Medicare premiums?
No. Recently altered IRS rules have made it illegal for any business to directly reimburse employees for medical costs or individual insurance plan premiums. The penalty for doing so is $100 per employee per day, meaning a grand total of $36,500 in fines, even for just one employee for a year. History In 2013, the […]
No.
Recently altered IRS rules have made it illegal for any business to directly reimburse employees for medical costs or individual insurance plan premiums. The penalty for doing so is $100 per employee per day, meaning a grand total of $36,500 in fines, even for just one employee for a year.
History
In 2013, the IRS issued Notice 2013-54, which outlined how employers who pay for employees’ health insurance premiums are now considered group health plans and must adhere to ACA guidelines.
Whereas this ACA rule previously applied only to companies with 50 or more employees, this new legislation, from the IRS, applies to all businesses. Therefore, small businesses can now be hit with these penalties if they don’t stop the practice.
Links
New IRS Rule Significantly Changes How Small Businesses Offer Health Insurance – Zenefits.com
Why Businesses Should Never Pay Individual Health Insurance Premiums – Zane Benefits
