Reimbursement of Employee Health Insurance Premiums (Including S Corporation Shareholders)
A little known and very under-publicized change to the insurance tax laws that took place on January 1, 2014, has exposed employers to a potentially heavy excise tax if they reimburse employees for health insurance premiums vs. enrolling in group plans. This includes employee shareholders.
Employer reimbursements or direct payment of health insurance premiums for individual policies or coverage under a spouse’s policy may be deemed a group health plan subject to the Affordable Care Act’s (ACA) market reforms if they are made for more than 1 employee. The deemed group health plan would not comply with the ACA’s benefit mandates for group health coverage and would be subject to excise taxes of $100 per day, per employee with no limit.
While the new […]
In late December Congress passed the Tax Increase Prevention Act of 2014, which served to extend more than 50 individual, business and energy tax incentives retroactively to January 1, 2014. The Act includes all of the popular incentives for individuals, such as the state and local sales tax deduction and higher education tuition deduction, as well as many business incentives, including the research tax credit, bonus depreciation and enhanced Code Sec. 179 expensing. A handful of extenders were not renewed, mostly targeted to energy efficiency.