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TASC’s Position on 2013-54 Employer Healthcare Arrangements (Section 125 & HRA Plans)

ACA and employer healthcare arrangements

Gene C. Ennis – Bradenton, FL – January 27, 2015 – Total Administrative Services Corporation (TASC) posted a recent blog article on their Capital Connection blog titled: TASC’s Position on 2013-54  in response to IRS Notice 2013-54 and its effect on employer healthcare arrangements including Section 125 Cafeteria Plans.

On Sept. 13, 2013, the IRS issued Notice 2013-54, which explains how the Affordable Care Act’s market reforms apply to certain types of group health plans, including health reimbursement arrangements (HRAs), health flexible spending arrangements (health FSAs) and certain other employer healthcare arrangements, including arrangements under which an employer reimburses an employee for some or all of the premium expenses incurred for an individual health insurance policy.

TASC’s position in this blog article is guidance in IRS Notice 2013-54 from the Departments were specifically aimed at health reimbursement arrangements or HRA Plans, and what the Departments refer to as “employer payment plans”, and doesn’t apply to Section 125 Cafeteria Plans.

TASC further reports in a more recent blog article that they haven’t seen any regulatory statements that convert a Section 125 Cafeteria Plan into a “group health plan”, that would make it subject to ERISA or ACA regulations.  They say IRS Notice 2013-54 does not redefine the meaning of the term “qualified benefits” under a Section 125 Cafeteria Plan. The implication is that Non Employer Sponsored Plans (i.e. non-exchange individual health insurance) are still be a viable salary reduction option under a Section 125 Cafeteria Plan.

TASC continues to stand behind their Non Employer Sponsored Plans and the Non Excepted Flexible Spending Account $100,000 IRS Audit Guarantee for their enrolled employers and their Participants for any Plan challenged by the IRS.

See the TASC $100,000 Audit Guarantee here:  https://tasccapitalconnection.com/2014/07/30/tascs-response-to-2013-54-compliance-bulletin-10-2/

TASC services include flexible spending accounts, health reimbursement arrangements, health savings accounts, COBRA administration, and other products designed to assist Human Resource leaders with corporate benefit and risk compliance administration. TASC is one of the nation’s largest privately held third-party benefits administrators and claims on their About Us page: “Last year our annual revenue exceeded a robust $74 million.” That would be $74 million in annual recurring fees.

My position, if the Departments wanted to include Section 125 Cafeteria Plans in IRS Notice 2013-54 they could of easily cited Section 125 Cafeteria Plans by name, instead of creating all the confusion with the new term “employer payment plan”. Is this just another Gruberism?  You decide.

I would guess with $74 million in “robust annual recurring revenue” TASC can afford the best legal opinion on this subject, and have a lot riding on it. They certainly appear pretty confident about why the Departments didn’t cite Section 125 Cafeteria Plans by name. My guess is they’re also confident that their $100,000 Audit Guarantee will probably never be challenged.