IRS – Illegal for employers to dump employees into Exchange

On May 16, 2014, the Internal Revenue Service (IRS) issued an FAQ response to clarify whether employers can provide added compensation to employees, so they may purchase individual health coverage.

The IRS FAQ answer says it is illegal for an employer that does not establish health coverage for employees to simply pay for individual coverage through a qualified health plan or a state marketplace (or the federal marketplace). It is also illegal for an employer to provide added cash compensation to an employee to pay for individual coverage. 

An employer that takes part in such an arrangement will be subject to an excise tax of $100 per day or $36,500 per year per employee.

You can link to the full IRS FAQ here.

This does not apply if an employee chooses to pay for individual health insurance with after tax income

Mental Health Coverage required in new ACA Plans

The Mental Health Parity and Addiction Equity Act, which was approved in 2008, requires insurers to provide mental health care that is comparable to or better than physical health coverage. However, only 4% of people surveyed recently by the American Psychological Association said they knew of the law, the same percentage as in 2010.Employee Benefit News (5/21)

Dropping health coverage could have tax, morale implications

Providing health care can be costly for small firms, but there are factors to consider before dropping coverage. Eliminating coverage could alter your tax burden, and it could have a negative effect on employees’ morale, experts say. “To go to your employees and say we’re throwing you out into the Wild West, go out and find your own coverage … may not go over well, especially [among] older employees and those who will get zero subsidy,” said Hugo Sibrian, CEO of Benefits & Risk Solutions. Bloomberg Businessweek (5/8)

Health Savings Accounts: More Than a Spending Account

HSAs offer consumers a unique vehicle to save for healthcare costs both now and into retirement years. However, many consumers view HSAs only as a spending account for managing in-year expenses. Employers and HSA program owners that are successful in helping employees understand the full HSA value proposition will benefit from increased employee HSA adoption.

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employee HSA adoption.

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Will Consolidation of providers reduce health costs?

When a federal judge agreed to dissolve a merger between Idaho’s largest hospital system and doctor practice, it put a Boise suburb at the center of a national debate over the consolidation of American medicine. Similar arguments are being raised in other areas, including Boston, Pittsburgh and Northern California, where hospital systems have gained strength through acquisitions of doctors’ practices and other hospitals at a time of rapid consolidation.

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