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Are you familiar with section POP plans (Premium Only Plans)? Although the policies purchased now may not be as favorable ... Section 125 was amended in 2009 to allow employers to use separate individual plans , and I'm looking now but I don't believe Obamacar overrode that specificlly
Yes.. but I believe it did
Cafeteria plans may no longer reimburse individually-owned insurance policies 
This may not affect most employers - however for the few employers sponsoring cafeteria plans that allow for participants to pay their individually-owned policy premiums with pre-tax dollars - the IRS and Treasury just eliminated this as an option. The reason for the change is to discourage employers from eliminating group coverage and to make it impossible for employers to send their employees to the Public Exchange and perhaps reimburse them with tax-free dollars for their cost for Exchange coverage.
Employers need to be aware that any reimbursement or payment of individual health coverage, whether it be inside or outside of an Exchange, cannot be made with tax-advantaged funds.
This was a newsletter from wageworks that I just received.
I don't think so ... can you provide a citation? ... The expansion of the ability in 2009 (Under OBAMA) was, according to MY sources, to facilitate the payment of the new policies
Sure.. let me see if its listed.
Most states are considering passing laws effectively mandating that employer offer Section 125 POP plans to their employees. The following states have already passed similar legislation.
I meant a legtal citation
I have access to Westlaw ... while you're looking I'll be diggin a bit
Ubet ... sold health insure insurance as part of a financial planning practice for may years before moving to a fee-only model ... and agree with your sentiments
Read B on this and let me know what you think
First thing I was is definitely true HRAs nand HSAs are out
I am moving to a fee only model as well... individual policies pay almost nothing.. and I've doing a big comparison of plans both group and individual in NJ and individual is almost always cheaper... actually, I think the only difference is that the group plans have 5% commissions and the individuals have about 2% built in
yep ... you should be paid for your time, expertise, and objectivity .. not for distributing financial product ( and doing so only where you have an agreement)
There has to be a way to be able to pay for the premiums.
With a pop plan, if they do still allow, the employer would increase their pay the amount of the insurance and allow the deductible pre-tax. Would the employer get hit with an tax liabilities?
Did you see this under C? (B certainly appears to say no)
The Code, ERISA, and the PHS Act impose various requirements on grouphealth plans, but certain of these requirements do not apply to a group health plan inrelation to its provision of excepted benefits. Code § 9831(b), ERISA § 732(b), PHS Act§§ 2722(b) and 2763. Although a health FSA is a group health plan within the meaningof Code § 9832(a), ERISA § 733(a), and PHS Act § 2791(a), a health FSA may beconsidered to provide only excepted benefits if other group health plan coverage notlimited to excepted benefits is made available for the year to employees by theemployer, but only if the arrangement is structured so that the maximum benefit payableto any participant cannot exceed two times the participant’s salary reduction election forthe arrangement for the year (or, if greater, cannot exceed $500 plus the amount of theparticipant’s salary reduction election). 26 C.F.R. §54.9831-1(c)(3)(v), 29 C.F.R.§2590.732(c)(3)(v), and 45 C.F.R. §146.145(c)(3)(v).
no.. what does that mean?
I'd really like to do a little more homework here, but it looks as if FSAs are being excepted if they stay within certain guidelines of benefit provision (amount, providing to new employess, etc)
I also saw in an article about the time that it went to supremem court... that ...
Im just giving you all the links they sent with the newsletter I received, :)
they were thinging about bringing back a provisions that would eliminate FSAs altogether (which implies that the recent limits are a produt of complying with
Affordable Care Act Changes for Flexible Spending Accounts (FSAs) - Part II of II
On Friday, September 13, 2013 Treasury published Notice 2013-54 (Notice) which preserves all health flexible spending accounts (health FSAs) that are considered excepted benefits but eliminates an employer's ability to use a stand-alone health FSA or other tax-favored arrangements, including Premium Reimbursement Arrangements or health reimbursement arrangements (HRAs), to help employees pay for individual health policies on a tax-free basis. In addition, the Notice addresses a number of specific topics related to FSAs and HRAs. As such, this Alert is the second of two.
Keeping health FSAs as excepted benefits 
Prior to this guidance, assuring a health Flexible Spending Account (FSA) was classified as an excepted benefit for purposes of HIPAA was important for two primary reasons: so COBRA continuation was not offered when the account was "overspent" and to avoid HIPAA portability requirements. But now, in addition to assuring Health FSAs are not swept into the W-2 reporting rules, FSA plans must also meet HIPAA excepted benefit rules to be offered in compliance with the new Affordable Care Act (ACA) requirements.
Generally, this means health FSAs must meet two conditions to be offered:
If the health FSA fails either of these conditions, it is subject to ACA's market reforms, such as no cost sharing for preventive services and the prohibition against annual and lifetime limits. By definition, the health FSA will not meet these ACA requirements.
Amendment for fiscal year cafeteria plans 
This may be one of the most misunderstood ACA provisions issued to date and applies only to employers with non-calendar year plans (Example: July 1 thru June 30 plans). Employees who wish to seek coverage on the Exchange, but would otherwise be prevented from doing so because their elections are generally irrevocable for the plan year, can be allowed to make a change if the employer amends their plan to allow this additional change-in-status event. A couple of points to remember: because of the employer shared responsibility rules, the guidance applies only to "applicable large" employers. These are employers who employed an average of at least 50 full-time employees, or full-time equivalents, based on hours of service during the preceding calendar year. Many industry experts, however, believe there may be relief to allow the same treatment for small employers.
It's also only applicable to cafeteria plans that have a plan year beginning in 2013 and that run benefits on a fiscal plan year rather than a calendar year.
While the guidance came out before the "Employer Mandate" (shared responsibility or play or pay) was delayed until 2015, it allows employers to amend their plan and permit employees who enroll for Exchange coverage to drop their employer coverage - essentially providing an additional qualified change in status reason.
Why would this be a critical amendment? ACA was written to assure that employees and individuals could purchase insurance coverage through state Exchanges. Allowing employees to change cafeteria elections mid-year allows maximum flexibility for employees.
90-day waiting period 
Health plan years that start on or after January 1, 2014 may not contain a waiting period for entry into the plan that exceeds 90 days (60 days in California plus other states may vary). In order for health FSAs to retain their status as an excepted benefit, they can only be made available to employees who are also eligible for underlying ACA-compliant health coverage. Thus, Health FSAs must assure that their waiting periods are no less than that of the underlying health coverage.
Therefore, employers should be sure that the waiting period for the premium-only and the health FSA portion of employers' cafeteria plans mirror the waiting periods for underlying health insurance plans or, in the case of the health FSA, may be longer.
If the cafeteria plan document does not currently reflect these terms, a simple amendment to the cafeteria plan can be adopted that states that the eligibility and entry dates into the cafeteria plan are the same as the underlying health insurance plan. This ensures no disconnect if the waiting period changes in the health insurance plan.
Amendment Action Steps
Premium Only Plan - Fiscal Year Plans (example July 1 - June 30)
Amend your Plan Documents to allow a one-time qualifying event giving permission for employees to enroll in the Exchange and opt out of their current health insurance plan and the premium only portion of the cafeteria plan.
January 1, 2014 Health FSAs and Premium Only Plans
Amend your plan to adjust the waiting period so that it is not more than 90 days (in most states). The waiting period adopted should be the same as the underlying insurance plan or for FSAs can be longer but in no case a shorter waiting period than the underlying health insurance plan.
This table may help you assess your current FSA plan and next steps:
Subject to Annual dollar limit prohibition?
Subject to preventive services requirements?
Excepted benefit health FSA
Not subject to the annual dollar limit prohibition and preventive services requirement, and does not provide minimum essential coverage (participant remains eligible for premium tax credits)
Consider employer contributions to $500 or matching a maximum of $1 for every dollar elected by the participants.
Non-excepted benefit health FSA funded under a 125 cafeteria plan
Fails to satisfy the preventive services requirement
Plan must be terminated.
Non-excepted benefit health FSA not funded under a 125 cafeteria plan
Not yet determined
Fails to satisfy the preventive services requirement; may also fail the annual dollar limit prohibition
After-tax employee contributions which participant may use to purchase individual market coverage
An arrangement under which after-tax employee contributions may be used to purchase individual market coverage and are structured as an employer payroll practice are permissible.
Pre-tax employee contributions which participant may use to purchase individual market coverage
Fails to satisfy annual dollar limit prohibition and preventive services requirement
Need assistance with any of these new requirements? Contact your Client Services Team.
Click here for a PDF download of this update.
A littl dated, but take a look at this:
thats the whole newsletter
Here's what I had read that lead me to believe that it wasn't doing away with FSAs altogether
(from that article I linked) Now the Department of Treasury in Notice 2012-40 is soliciting comments on whether to modify the use-it-or-lose-it rule. Anyone can send in comments via email to email@example.com (subject line: IRS Notice 2012-40) through Aug. 17, 2012.
Wait.. i think you are talking about the rule that allows FSA's to roll over up to $500 from year to year of unused funds.. is that right?
that's part f it
BUt that implies that FSAs are still there'
Yeah it's that 2500 cap that takes the wind out of what can be done there I guess
but that's a little different from eliminating FSAa as well
Everything in this newsletter is saying pre-tax plans for insurance are not allowed... am I reading that right?
I don't think it eliminates the pay for ins through an FSA ... but it's limited to 2500
Tell you what. I have an attorney I can call that can point me to the exact provisions
and where it stands no
he's an ERISA guy and know benefits generally
Let me move us to the Q&A mode, and I can make a couple of calls and get the definitive for you ... (know your objective)
that way the question stay open... and then you can come back here to this same url: http://www.justanswer.com/tax/841lt-irs-recently-changed-law-disallow-employers.html
and with the FSA and the 2500 limit, that doesn't really do much unless they are receiving a subsidy. Maybe thats why they did that to FSA's before the law took place.
to check ... this will allow the question to syaty open
yes, exactly, not nearly enough
ok.. i will wait for an update then.
thanks for looking into it
Good deal ... I'll move now ... and then check back this afternoon, if you would
no prob, good question (my gut is that you're fears are warranted, but I'll get the exact citation and see if there ANY workaround)
OK Scott her we are.
DO me a favor and don't reply until I come back with something ... that'll just let the questions sit here until I come back.
What about defined contribution benefit plans?
Absolutely understand. Getting ready to go into one myself.
I Keep reading about 105 plans as being a solution. Some say it works and others say no. Still trying to figure out who's right?
Yes, I think that 105 IS the answer .. to the small employer issue.Federal regulations prohibit businesses from paying directly for employee's individual health insurance premiums, outside of an HRA (Health Reimbursement Arrangement), or other IRS/HIPAA/ERISA-qualified tax-free vehicle (e.g. Section 125).The two big reasons they need to do it right is that, first, paying for Individual Health Insurance without an qualified HRA Causes the Employer to "Endorse" the Individual Health Insurance Plans, and second, paying for Individual Health Insurance without an qualified HRA Causes the premium to be included as taxable income.You may already know these guys but they're out ahead of things as much as anyone it seems:http://www.zanebenefits.com/products/health-insurance-premium-reimbursement/Lane
Yes I do.. I've spoken with Rick there a couple times over the years and considered using their product because I am big fan of Paul Pilzer.
However, recently, they contradicted themselves on a very recent article. They didn't retract it but in the comment section, Eric from Zane made it very clear that an employer or employee cannot pay for individual premiums on a pre-tax basis. They are now saying that it has to be done through payroll but somehow can still be pre-tax. Their infograph on their homepage indicates one of the steps as putting it through payroll.
Thanks. I did see that before. I'm on their site alot. There are so many contradicting articles out there. My thought is, even if there is a work-around, I don't think the IRS wants employers paying for it. I worry if I offer it that way, does the irs come back and say nope... all those defined contribution benefit dollars are now taxable income.
It doesn't sound like there is really a clear answer to this. I am trying to find an article by a tax attorney I read yesterday that said something to the affect that people will try to side step the law, but the irs is very clear. They don't want employers paying for individual policies. If I find it, I will let you know.
The sad part about them changing these laws is that they are killing the working people. Its sad.
If this has helped, I would appreciate a feedback rating of 3 (OK) or better (excellent, is ideal)… That's the only I get credit for the work.