ACA question

[NECPA in NEBRASKA]

A client asked me this question and I'm not sure how to answer it or if I should direct him to someone else. His corporation has a medical reimbursement plan and reimburses him and his spouse for their individually purchased health insurance. They have no other employees. Does this qualify as his employer providing him with health insurance when he looks at the exchange offerings? It's a reimbursement, not a company plan so I'm not sure if that is considered provided. I know that I should be studying this stuff more, but I need to get the extensions out of here first.

Thanks!

[Guest Taxed]

I don't believe a medical reimbursement plan qualifies as employer sponsored health plan.

Is this a sec 105 plan because they do not qualify?

[Jack from Ohio]

That kind of question is the reason I will not give that kind of advice. That is an insurance/ACA regulation question. Tread lightly....

[Mr. Pencil]

His corporation has a medical reimbursement plan and reimburses him and his spouse for their individually purchased health insurance. They have no other employees. Does this qualify as his employer providing him with health insurance when he looks at the exchange offerings?

Even on a professional site like this, there is tons of misinformation. ACA is a major shift in social policy, so we are going to see different variations and different rulings for a long time. Unless you want to do some serious study, at least comparable to an insurance license, you do your clients no service and bring liability on yourself by trying to figure it out. Especially this early in the plan. Refer such questions to the official published information and help lines.

For example, this link https://www.healthcare.gov/what-if-someone-doesnt-have-health-coverage-in-2014/ says, "any individual insurance plan you already have" qualifies as minimum essential coverage. That seems to answer your question pretty clearly. I would guess you won't find a better answer at this time.

[kcjenkins]

I would guess you won't find a better answer at this time.

And since that just illustrates how confusing the current rules are, and in such a state of flux, the only smart thing is to avoid giving advice, except the advice to consult an insurance professional for such questions. For example, in the question about the sec 105 plan, direct them to their insurance company. They will know if their plan, in that state, is in compliance, etc. Don't open yourself up to liability for a wrong answer. Don't be like the banker that gives tax advice, and is right maybe a third of the time, because he does not understand all of the variables that affect the tax treatment. We've all had to clean up after one of those, right?

[NECPA in NEBRASKA]

Thanks, everyone. That's why I don't want to answer anything except tax questions about this. I will tell them to talk to their insurance company.

[Mr. Pencil]

Thanks, everyone.... I will tell them to talk to their insurance company.

Please don't thank me if you aren't going to follow my advice. And by the way, a medical reimbursement plan IS a tax question, not an insurance question.

[jklcpa]

NECPA, take a look at this article and its links and maybe it will help you:

http://ftwilliam.com/articles/AcctPlans13-54.html

[Mr. Pencil]

NECPA, take a look at this article and its links and maybe it will help you:

http://ftwilliam.com/articles/AcctPlans13-54.html

Thanks. That's very interesting and helpful. It sounds like the existing individual policy can be maintained (assuming the insurance company allows it), but the corporation's deduction for reimbursement will end (or be taken as taxable compensation). Section 105 is one of the main reasons some people form a corporation, so there we are going to have some new tax planning engagements for sure!

[NECPA in NEBRASKA]

Thanks to everyone. Mr. Pencil, I did think that the question was tax related and thought that it was not employer provided, but I was not sure. This new article is just what I needed, but I am going to dig a lot more. I just went to an 8 hour school and these changes weren't mentioned even though there was a company that did a presentation that handles 105 plans. I'm signed up for another 30 hours in the next couple of months, so I hope that there is more coverage of this. I am going to look for something that specifically covers the act. Fortunately, I only have a couple of companies that provide health insurance for anyone. Thanks again.