Employers with HRAs, FSAs or Employer Payment Plans Must Make Changes for Affordable Care Act– June 09, 2014 by Maura Corrigan

The IRS recently posted a reminder to employers who offer tax-advantaged health accounts to their employees. The reminder warns employers that there is a penalty of $100 per day, per employee for company health plans that do not comply with the Affordable Care Act (ACA).

Notice 2013-54 essentially requires that effective January 1, 2014, health reimbursement accounts (HRAs), flexible spending arrangements (FSAs) and employer payment plans MUST comply with the ACA because they are considered group health plans. Since the ACA provides that no plan can impose annual or lifetime limits on benefits, many of these plans are not in compliance.

If you’re an employer that reimburses any employees for substantiated premiums that they pay on their own personal health insurance policy, even a policy they received from a state exchange, you’re not in compliance and subject to the hefty penalties of the ACA. Talk with your accountants and benefit plan advisors now about the best course of action before penalties stack up.

We want to hear from you! We encourage you to share this blog post on social media or contact Maura Corrigan at mcorrigan@cohencpa.com or a member of your service team for further discussion.

This communication is for information only, and any action should only be taken after a detailed review of the specific situation and appropriate consultation.