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TaxRobin, Senior Advisor
Category: Finance
Satisfied Customers: 15308
Experience:  15 years of experience in financial advising with emphasis on tax issues.
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We were granted a $2000 retirement reimbursement toward our

Customer Question

We were granted a $2000 retirement reimbursement toward our health insurance which is now being taken away from us because we are not dealing with the assigned broker, One Exchange. We started out with them but they were unable or unwilling to fulfill our insurance requests so we sought out an insurance company, Mutuall of Omaha, who gave us what we wanted. Can't they send the $2000 to our new insurance company? HELP!
Submitted: 1 year ago.
Category: Finance
Expert:  TaxRobin replied 1 year ago.


Unfortunately the transfer of the funds to Mutual of Omaha would be seen as a cash payment for your health insurance. This would violate PHS Act sections 2711 and 2713, among other provisions, which can trigger penalties such as excise taxes under section 4980D of the Code.

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.

The arrangement is group health plan coverage within the meaning of Code section 9832(a), Employee Retirement Income Security Act (ERISA) section 733(a) and PHS Act section 2791(a), and is subject to the market reform provisions of the Affordable Care Act applicable to group health plans.

I do wish I could tell you differently as I am certain the $2000 would be helpful to you.

I know you wanted to hear a different response but if my answer addressed your question please rate below or above (let me know if you have difficulty as I believe the system changed), if you need more information reply below.

Expert:  TaxRobin replied 1 year ago.

Hello Jay

Checking back to see if you had a response now that you had time to view.

Please post below.