Health Care ACA Questions Answered by Department of Labor
Last week, the U.S. Department of Labor (DOL) released more Frequently Asked Questions (FAQs) regarding implementation of the Affordable Care Act (Part 22). The FAQs were jointly prepared by DOL, and the Health and Human Services and Treasury departments.
These FAQs in particular address whether employers who offer premium reimbursement to employees who participate in health exchanges are in compliance with market reforms.
Q1: My employer offers employees cash to reimburse the purchase of an individual market policy. Does this arrangement comply with the market reforms?
No. If the employer uses an arrangement that provides cash reimbursement for the purchase of an individual market policy, the employer’s payment arrangement is part of a plan, fund, or other arrangement established or maintained for the purpose of providing medical care to employees, without regard to whether the employer treats the money as pre-tax or post-tax to the employee … Under the Departments’ prior published guidance, the cash arrangement fails to comply with the market reforms because the cash payment cannot be integrated with an individual market policy.