IRS Notice Re : 2015-87 - HRA s & Etc

[Lee B]

COPIED FROM THE BASE NEWSLETTER:

 

On December 16th, the Treasury Department and IRS released Notice 2015-87 regarding the treatment of employer health care arrangements and the market reforms of the Affordable Care Act. Below are a few highlights from the most recent Notice 2015-87:

1. The notice reaffirms that an HRA or employer payment plan with one participant can still reimburse individual market premiums without violating the market reforms.
2. The notice solidifies that an HRA or employer payment plan with two or more participants cannot pay or reimburse individual market premiums. These types of arrangements are subject to the $100 per-employee per-day penalty.
3. The notice amended previous guidance regarding Integrated HRAs. Prior to this notice, the benefit amount of the Integrated HRA could be extended to a spouse and dependent who were not insured by the employer's group insured plan, but
4. insured by another employer's group insurance plan. From this point moving forward the Integrated HRA benefit amount can only be extended to individuals who are insured by the employer's group insurance plan.
5. The notice reiterates that an employer who utilizes an Excepted Benefits HRA or 125 Plan for two or more participants does not violate the market reforms.
6. The notice further confirms that an employer cannot utilize a Section 125 plan to pretax individual market premiums, even if it is funded solely by the employee. These types of arrangements are subject to the $100 per-employee per-day penalty.

Many of the questions addressed elaborate on IRS Notice 2013-54, FAQs about the Affordable Care Act Implementation (Part XXII), Notice 2015-17, and final regulations implementing the market reform provisions of the ACA

[Randall]

No. 2  Does this refer to the other employees of an S corp or does it include the S Corp shareholder/employee?  I understood that Notice 2015-17 allowed the S Corp shareholder/employee to continue previous treatment thru 2015 (that is ins premiums reported in W2 Box 1, but not Box 3 & 5).

[Lee B]

2 hours ago, Randall said:

No. 2  Does this refer to the other employees of an S corp or does it include the S Corp shareholder/employee?  I understood that Notice 2015-17 allowed the S Corp shareholder/employee to continue previous treatment thru 2015 (that is ins premiums reported in W2 Box 1, but not Box 3 & 5).

My understanding is that it refers to both the employees and the S Corp shareholder

[kcjenkins]

That's my understanding too.  The exception for shareholder is just for where that sh is the only employee.

[Abby Normal]

Here's an AICPA article on S corp shareholders, confirming what others have said.

[Randall]

51 minutes ago, Abby Normal said:

Here's an AICPA article on S corp shareholders, confirming what others have said.

This article only includes Notice 2015-17.  It does not mention Notice 2015-87.  My question is does 2015-87 override (stop) the extension for the S Corp shareholder/employee that 2015-17 gives him thru 2015.  I'm referring to an S Corp shareholder/employee who has other employees (not those with only one employee-the shareholder).

 

[Abby Normal]

When I searched for the article, I limited results to the last month, so it's a recent article. I think the party's over for s corps with multiple employees and no group plan. We can add to W2 for 2015, after that, we just have to increase wages for shareholder and employees who buy individual policies.

[Randall]

1 hour ago, Abby Normal said:

When I searched for the article, I limited results to the last month, so it's a recent article. I think the party's over for s corps with multiple employees and no group plan. We can add to W2 for 2015, after that, we just have to increase wages for shareholder and employees who buy individual policies.

I agree for 2016.  I'm just trying get the W2 right for 2015 and avoid amended and corrected W2.