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Barbara
Barbara, Enrolled Agent
Category: Tax
Satisfied Customers: 3183
Experience:  18+ years of experience in tax preparation; 25+ years of experience as a real estate/corporate paralegal.
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I have a sort of complicated tax question on HDHP's. Could

Customer Question

I have a sort of complicated tax question on HDHP's. Could you help?
Submitted: 1 year ago.
Category: Tax
Expert:  Robin D. replied 1 year ago.

Hello,
I will certainly help if I can. If not I will get someone that can.

What is your question?

Customer: replied 1 year ago.
My question is specific around our high deductible health plan and potential tax implication.
My client is a self funded employer with a high deductible plan. They are looking at engaging a third party organization to help their employees negotiate their medical bills. The third party will be negotiating bills down for the employees, where they will not actually be paying the full price that the carrier has adjudicated. The third party will be rebating funds back to the employees. Here are my two questions:1. The administrator is not able to adjust the employee deductible based on the negotiated prices that the the third party has achieved. Is there any regulation or documentation that we can point to relative to tax law that says this is OK for the employer to knowingly be offering this to employees where they will save.2. Are the employees at any risk of running afoul on tax issues if those savings achieved by the third party are sent back as taxable 1099 funds?
Expert:  Robin D. replied 1 year ago.

Yes, you are correct, that is complicated.

Give me a second to work through that ,ok?

Customer: replied 1 year ago.
Not a problem. And what I really need is a regulatory point that will make the client comfortable with their approach. They are looking to reward their employees for lowing the healthcare expenses, but do not want to run into HDHP/IRS issues.
Expert:  Robin D. replied 1 year ago.

Yes, I figured out that part.

Will look an dif some one else knows off the top of their head they will post, but i will be back.

Expert:  Robin D. replied 1 year ago.

I am going to OPT OUT (just so anyone else can see the actual question now and assist if they know).

I will came back but if someone else knows I do not want to delay them seeing the question and posting too.

Customer: replied 1 year ago.
OK. Will they see the detailed question? I didn't realize the first note would get submitted as the question.
Expert:  Robin D. replied 1 year ago.

Yes, all experts now will see each post by each of us.

Sorry about delay in responding , I was in research for your question still.

Customer: replied 1 year ago.
Thanks
Expert:  Barbara replied 1 year ago.
Different expert here - My name is ***** ***** it will be my pleasure to assist you today.
As you probably know, third-party administrators are important entities in the health care industry and have the expertise and capability to administer all or a portion of the claims process. As in your client's case (a self-funded employer), they are contracted to administer services, including claims administration, premium collection, enrollment and other administrative activities.
The following links contain excellent information which you will find helpful:
http://www.nisbenefits.com/pdfs-sell%20sheets/NIS%20-%20Self-Funding.pdf
http://www.nisbenefits.com/pdfs-sell%20sheets/NIS%20-%20Self-Funding.pdf
http://www.ibpis.com/pdf/IBP_Employers_Guide_to_Self_Funded_Health_Care_Plans.pdf
Please let me know if I can assist you further.
Thank you and best regards,
Barb

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