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How Employers Are Offsetting Some of the ObamaCare Health Insurance Rate HikesEmployers nationwide are learning how to offset some of the ObamaCare high insurance rate increases by reducing payroll taxes with Section 125 Cafeteria Plans. In many cases, employer savings can add up to as much as 20 percent of every dollar being passed through the plan.
IRS Publication 502 – What Medical and Dental Expenses Can Be Deducted Tax Free?Publication 502 - Main Content Table of Contents What Are Medical Expenses? What Expenses Can You Include This Year? Community property states. How Much of the Expenses Can You Deduct? Whose Medical Expenses Can You Include?
2014 Qualified Transportation Fringe Benefit – Proposed $220 Parking – $220 Transit Benefit – $35 BicycleH.R. 228 Commuter Parity Act of 2013 Bill status is currently "Referred to Committee", and is the best source of information at the moment for proposed 2014 Qualified Transportation Fringe Benefit amounts.From: http://thomas.loc.gov/cgi-bin/query/z?c113:H.R.2288.IH:H.R.2288 -- Commuter Parity Act of 2013.
Qualified Transportation Fringe Benefits end under ARRA December 2013The good news is H.R.2288 — Commuter Parity Act of 2013, current status “Referred to Committee” (10/03/2013), should extend the benefit to 2014. Qualified Transportation Fringe Benefits – Proposed $220 Parking – $220 Transit – $35 Bicycle – Commuter Parity Act of 2013 for more information about proposed 2014 limits.
The Explosion in Healthcare Premiums in One Convenient ChartThe Society of Actuaries have crunched the numbers and gave us a tidy little forecast of insurance premium rate hikes under Obamacare.
Section 125 Plans in the Post-Reform Environment Issues for Individual InsuranceThe authors conclude that while reform provisions provide fairly strong arguments allowing individual insurance policies to be purchased through a section 125 plan, federal regulators need to give employers, insurers and public policy officials clear guidance on how section 125 plans can be used for any type of comprehensive individual health insurance sold outside of exchanges.
What is an Excepted Benefit Under PPACA (Health Care Reform, ACA, ObamaCare)?Q: What benefits are not governed by PPACA, the 2010 health reform law? A: The law does not apply to “excepted benefits” and retiree-only health plans. The IRS, Labor Department and Public Health Service Act regulations identically define excepted benefits. Excepted benefits are:
Obamacare update: What delaying the employer mandate means for businessesBy Kristen Dougherty Senior Vice President, Univest Insurance, Inc. The delay in a key Obamacare provision has created plenty of uncertainty for American businesses. The Obama Administration signed the Affordable Care Act (ACA) into effect in 2010. A significant part of that legislation includes the employer mandate which requires businesses with more than 50 employees to offer insurance to employees working a minimum of 30 hours as of January 1, 2014. In addition, that coverage must be deemed “affordable and adequate coverage” as defined by the legislation. In July, the mandate was delayed until January 1, 2015. What does that mean for mid-sized to large employers? Most importantly, it gives businesses that will be offering insurance to their employees more time to plan for this significant change, in particular for those employees in the 30-40 hour range, as well as variable hour employees. What should employers plan to do in 2014?
Keep It Simple Solutions by CoreDocuments.com for Section 125 and HRA Plans for January 1, 2014Bradenton, FL September 5, 2013 – Today, Core Documents, the nation’s leading provider of affordable Section 125 POP, FSA, Cafeteria, and HRA Plan Documents since 1997 announced their Keep It Simple Solutions (KISS) promotion for January 1, 2014 post-health care reform compliance and consulting (aka PPACA, ACA, and ObamaCare) for:
- $99 Premium Only Plans to pretax insurance premium,
- $149 Health FSA to pretax out-of-pocket medical expenses,
- $149 Dependent Care FSA to pretax dependent care expenses,
- $179 Premium Only Plan with HSA savings account module
- full Cafeteria Plans for all three of the above, or any combination,
- $149 Section 105 HRA for Small Employers with less than 3 employees,
- and $299 Section 105 HRA Defined Contribution Plans (Integrated and Non-Integrated).
Why Every Employer Should Have a Section 129 Dependent Care Assistance Plan (DCAP) Flexible Spending Account (FSA)Every dollar ran through the Section 129 DCAP FSA plan reduces an employer’s payroll. Therefore, employers don’t have to pay FICA, FUTA, or workers’ comp premiums (depending on your State) on those dollars. In many cases, this savings can add up to as much as 20 percent of every dollar being passed through the plan. Employers struggling to cover overhead in a failing economy should consider that there could be as much as $1,000 in tax savings per employee who utilize a company Dependent Care Assistance Plan (DCAP) Flexible Spending Account.
Technical Release No. 2013-03 – Market Reform and Affordable Care Act to HRAs, Health FSAs, Individual Premium Reimbursement HRAs, etc.
Application of Market Reform and other Provisions of the Affordable Care Act to HRAs, Health FSAs, and Certain other Employer Healthcare ArrangementsPrinter Friendly Version Date: September 13, 2013 From: http://www.dol.gov/ebsa/newsroom/tr13-03.html
I. Purpose and OverviewThis Technical Release provides guidance on the application of certain provisions of the Affordable Care Act(1) to the following types of arrangements: (1) health reimbursement arrangements (HRAs), including HRAs integrated with a group health plan; (2) group health plans under which an employer reimburses an employee for some or all of the premium expenses incurred for an individual health insurance policy, such as a reimbursement arrangement described in Revenue Ruling 61-146, 1961-2 CB 25, or arrangements under which the employer uses its funds to directly pay the premium for an individual health insurance policy covering the employee (collectively, an employer payment plan); and (3) certain health flexible spending arrangements (health FSAs). This Technical Release also provides guidance on section 125(f)(3) of the Internal Revenue Code (Code) and on employee assistance programs or EAPs.
How Health Care Reform Affects Section 125 Premium Only Cafeteria Plans January 1, 2014Today, Core Documents, the leading provider of affordable Section 125 Cafeteria Plan Documents to small employers, published new information on How Health Care Reform Affects Section 125 Premium Only Plans January 1, 2014. The good news is Core Documents expects Section 125 Premium Only Plans to remain a viable employer and employee tax favored program after Healthcare Reform, and for years to come, with only minor changes described below.
HSA or HRA? Why Employers Consider HSA Plans and actually Buy HRA PlansThe current Administration has vigorously promoted Health Savings Accounts, or HSAs, as the solution to the nations healthcare dilemma. However, employers by the thousands are discovering that Health Reimbursement Arrangements, or HRA Plans, are a better solution. Why? The Health Savings Account system cost the company more money than an HRA. It's a no-brainer, simple economics. However the HRA has been kept from the spotlight by this administration. Discover why...
Employers: Update Your Section 125 Premium Only Plan
The IRS and the Department of Labor require employers to establish a formal plan document and summary plan description before they allow their employees to pretax insurance premium. The beginning of a new tax year is historically when most employers start a new Section 125 Premium Only Plan year.
Bradenton,FL, October 5, 2012- Section 125 Premium Only Plans allow employees to pretax or avoid paying income taxes on their portion of employer sponsored health insurance plans. January marks the beginning of a new Section 125 plan year for most employers.
If your company takes advantage of Section 125 pretax deductions you might want to verify that you actually do have a current Section 125 Plan Document. It’s not unusual for employers to take Section 125 insurance pretax deductions for years without knowing that a formal plan document and summary plan description are required by the IRS and Department of Labor.
Section 125 Cafeteria Plan IRS Audit Disaster Await Many Small EmployersEmployers all over the country are in precarious positions regarding a possible IRS audit that would routinely include a review of their required Section 125 plan documents. Many employers allow their employees to take the insurance premium and medical expense deductions without the knowledge that the IRS and the DOL require a formal plan document and a Summary Plan Description. The end result will be disallowing all prior deductions, assessment of all unpaid back taxes for the employer and employee, plus interest and penalties. Are you one of these employers?
Why Your Business Needs a Full Section 125 Cafeteria PlanBradenton, FL October 5, 2012 – One of the most underused employee benefits for small businesses today is the Section 125 Cafeteria Plan. These plans simply allow employees to withhold a portion of their salary on a pre-tax basis to cover the cost of qualifying insurance premiums, medical expenses and dependent care expenses. Because Section 125 Cafeteria Plan benefits are free from federal and state income tax, an employee’s taxable income is reduced which increases their take-home pay. And because the Section 125 Cafeteria Plan reduces employee gross income for purposes of income tax, the employer also enjoys a reduction in their payroll tax liability by eliminating matching FICA taxes of 7.65%, and possibly workers’compensation (depending on your state).
Can An Employer Reimburse Individual Health Insurance through a Section 125 or HRA Plan?Employers can pay individual health insurance premium under Section 125 or an HRA as far as IRS regulations are concerned. However, around the year 2000 the new HIPAA (Health Insurance Portability and Accountability Act) slipped in a law that says if an employer reimburses more than 1 individual health insurance plan via a Section 125 or HRA then that employer will be deemed to have tried to circumvent group health insurance mandated coverage or mandated benefits, and the employer could be held liable for whatever the individual policy did not pay that the group plan would have paid
HRA and FSA Summary of Benefits and Coverage (SBC) SBC Sample by Core Documents, IncHealthcare Reform requires that most Employers with HRAs provide a Summary of Benefits and Coverage (SBC) to each of their employees. The intent of the SBC is to provide a convenient and consistent way for consumers to compare the benefits and costs of different insurance coverages so that they can make an informed decision. Since the HRA is provided by the Employer, free of cost to the Employee, we have a hard time understanding why the Employer is required to provide the SBC for their HRA and feel that it may be an unnecessary burden, especially for the Small Business Owner that cannot afford a group insurance benefit, but wants to provide an affordable tax-free Health benefit to their employees.
HRA Requirements and Health Care ReformPROHIBITION ON ANNUAL LIMIT Health care reform prohibits an annual limit on HRAs unless the participant is enrolled in a major medical health plan that adheres to the prohibition on annual limits. The only way to provide the full benefits of a comprehensive HRA is to require that the participant be enrolled in a major medical health plan if they want the full benefit. Otherwise, they can only receive reimbursement of dental, vision, and eligible insurance premiums. Unless you would like to change your HRA to an unlimited benefit.
Core Launches New Flex Affiliate Program for CPAs, Accountants, Payroll Companies, PEOs, and Insurance Agents
How would you like to help your clients with cutting-edge healthcare solutions and benefit tax relief by becoming an Affiliate of Core Documents? Now you can private label our entire web site with your name, logo and contact information. If you're an insurance agent, broker, TPA, CPA, accountant, bookkeeper, PEO, payroll or insurance company contact Gene Ennis at 1-888-755-3373 for more information.