Real answers for your healthcare questions
Can a small business reimburse employees for individual health insurance?
Answer
Yes, certain employer arrangements can reimburse employees for individual health insurance premiums and qualified medical expenses. Common examples include the Qualified Small Employer HRA and the Individual Coverage HRA, each with its own rules.
What to Know
A business should not simply give employees tax free reimbursements for individual premiums without using a compliant arrangement. Eligibility, annual limits, employee classes, notices, substantiation, and coordination with Marketplace subsidies can differ depending on the HRA used.
What to Do Next
Before reimbursing premiums, choose the appropriate formal arrangement and follow its requirements. Employees should also understand how an HRA offer may affect eligibility for Marketplace premium tax credits.
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