Are Your Health Care Premiums Taxable?

Under the current Affordable Care Act rules if your employer does not cover its employees with a group health care policy and either reimburses an employee for health care insurance that they have purchased or pays for health care insurance directly for the employee for a non group policy, the premiums are taxable as additional income.  These premiums are added to box 1 of the employee's W2 and fully taxable for all taxes.  If an employee is covered under their spouse's group policy provided by their spouses employer, this rule does not apply.  An employer can, however, set up a Qualified Small Employer Healthcare Reimburement Arrrangement (QSEHRA) which will enable the employer to reimburse the employee for health care tax free.  The employer must qualify to do so and have a compliant plan set up under current IRS rules.  This very complicated and has severe consequences if not set up as a compliant plan.  We highly recommend that an employer does not attempt this on their own.  There are numerous companies that offer services to set this up and manage it.  Compare their pricing and guarantees and beware of low first year rates that have a significant year two increase. We highly recommend a company that we have experience with, TASC.  TASC has very affordable pricing and a rock solid guarantee as well as a superb track record.  We have had nothing but good reports from those who are using their services.  The regional sales rep. for the Mid Atlantic area is Paul Cannon.  He is very good to work with and can be reached at 724-355-5789.  If you tell Paul that I (Randy Rhoads) referred you, you will receive a discount off of their regular fees.  If you have any questions, we can be reached at 717-790-0697.