According to the IRS, an arrangement where a company gives employees tax-free sums to cover PPACA marketplace premiums qualifies as a group health plan and is therefore subject to PPACA market reform provisions, including the prohibition on annual limits for essential health benefits and the requirement to provide certain preventive care services without cost sharing. These employer payment plans cannot be integrated with individual policies to meet PPACA requirements, according to the IRS.
Therefore, these particular employer payment plans don’t comply with the PPACA, and employers who establish and maintain these arrangements may be subject to an excise tax of $100 per day for each employee, according to the IRS. For more information, read the full IRS notice on employer healthcare arrangements here.
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