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Reimbursing Employees for Individual Health Insurance Policies Subjects Employers to Hefty Excise Taxes

December 4, 2014

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What, you may ask? That’s right. It no longer works to reimburse employees for the purchase of an individual health insurance policy. I know, many of you have always done this. Well, not any longer under guidance issued under the Affordable Care Act (ACA). Beginning with an IRS Notice issued in September 2013 and most recently in November 2014 DOL FAQs, the federal government has made it clear that this practice does not work under the ACA. While it flew under the radar for some, this rule became effective in 2014.

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Why, you may ask? When an employer reimburses an employee for an individual health insurance premium, or pays the premium directly to the insurer, it has (perhaps inadvertently) established a “group health plan” which is subject to the so-called Public Health Service Act mandates of ACA.

ACA Employer Mandate / Reporting and Tracking Hours

June 30, 2014

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As if compliance with the ACA’s market reforms and complex plan design rules (including an assessment of affordability and minimum value), hasn’t caused enough headaches – now you have to prepare to track and report detailed information about your compliant offers of coverage?  Unfortunately, the answer is “yes”.  Time spent now tracking information and making decisions about how an employer plans to report in early 2016 (for the 2015 plan year) will make completion of those yet-to-be-released forms more feasible in the future.

Shakespeare-TiredTo track or not to track, that is the question….

ACA reporting may not be required until the first quarter of 2016, but employers need to get prepared now to comply with those requirements due to the detailed information required.  While tracking hours may be inevitable for certain employers

Form 1023 – To File (Now) Or Not To File (Wait), That Is The Question

The date when an organization files its IRS Form 1023 application for federal tax-exempt status has an effect on the date the organization will be considered tax-exempt under Section 501(c)(3). If an organization files Form 1023 within 27 months after the end of the month in which it was legally formed, and the IRS approves the application, the effective date of Section 501(c)(3) status will be retroactive to the date of formation. If an organization does not file within 27 months of formation, Section 501(c)(3) status is generally effective as of the date it files the Form 1023 application (the postmark date).

For organizations with gross receipts exceed more than $10,000 annually, the U.S. Department of Treasury generally requires a fee of $850 to process a Form 1023 application (for organizations with gross receipts do not exceed $10,000 annually, the fee is $400). However, the IRS has been developing an

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