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Category: Tax
Satisfied Customers: 9758
Experience:  Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
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Is health care insurance premium paid by a disabled person and reimbur

Customer Question

is health care insurance premium paid by a disabled person and reimbursed by employer considered income and taxable?
Submitted: 6 months ago.
Category: Tax
Expert:  Lane replied 6 months ago.
Hi,...The answer to your question depends on the arrangement, structure, of how this is done....If this is done through an HRA (employer Health Reimbursement Arrangement) that is compliant with the requirements for ACA (the Affordable Care Act) then this is not taxable to the recipient of the reimbursement....Your employer should be able to tell you whether they've complied...Generally there has to be a group heath plan attached....There are some exceptions to these ACA reforms. Specific exemptions from the ACA requirements include:Plans with fewer than two participants who are current employeesPlans that provide only ancillary benefits, including:Accident-only coverageDisability incomeCertain limited-scope dental and vision benefitsCertain long-term care benefitsBenefits under an employee assistance program, if the program does not provide significant benefits in the nature of medical care or treatment
Expert:  Lane replied 6 months ago.
The ACA does allow employers to offer HRAs if they are integrated with an employer-provided group plan offering ACA-compliant coverage....The integration rules are complex, but to offer an integrated plan, the employer must offer group health care coverage to all employees eligible for the HRA, and the employees must be covered under a compliant group health care plan (although that plan may be offered through another provider (such as the employee’s spouse)).
Expert:  Lane replied 6 months ago.
here are some of the terms you might want to bring up with your employer: (FTE stands for Full Time Employees)...In general:Employer with over 50 FTE need to offer a group plan.Employers with less than 2 employees can offer whatever they want.Employers with less than 50 FTE should look into group plans first, but can consider an HRP (which is like an HRA with special rules).
Expert:  Lane replied 6 months ago.
Bot***** *****ne here are the options for doing this in a way that's not taxable:...Under the ACA you can still offer these types of HRAs:Integrated HRA – An HRA linked to a group plan.Retiree-Only HRA – Retiree-only HRAs are exempt from the Market Reforms.One-Person Stand-Alone HRA – One-person stand-alone HRAs are exempt from the Market Reforms. (one employee plus business owners for example).Also, in General You May also be able to Offer a Specific Type of Healthcare Reimbursement Plan (HRP) Called a Section 105 Medical Reimbursement Plan
Expert:  Lane replied 6 months ago.
An HRP does not break the DOL rules and incur the excise tax like an HRA does.An HRP is not considered health insurance, the employer simply reimburses the employee for health related expenses up to a set amount each month.A HRP does not impose a plan-wide maximum annual benefit and does not allow annual roll-over like an HRA. Although there is a “use-it-or-lose-it” rule.There is no limit to the amount of money an employer can contribute to an employee’s HRP. There is also no minimum contribution might want to have your employer look at this:...
Expert:  Lane replied 6 months ago. hope this has helped....Please let me know if you have any questions at all....If this HAS helped, and you DON’T have other questions … I'd appreciate a positive rating (using the faces or stars on your screen, and then clicking “submit I know it takes an extra step, but JustAnswer won’t credit us for the work until you rate....Thank you!Lane……I hold a law degree (JD, Juris Doctorate), with concentration in Tax Law, Estate law & Corporate law, an MBA, with specialization in finance & tax, as well as CFP® and CRPS designations. - I’ve been providing financial, Social Security/Medicare, estate, corporate, both for-profit and non-profit, and tax advice, since 1986.

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