Changes to Regulations Affecting Renewing Plans (HRA, FSA, PRA)

[grmy2h]

By Ric Joyner, CEBS, GBA, RPA, CFCI

On September 13, 2013 the IRS changed the rules with Notice 2013-54 for Premium Reimbursement Arrangements (PRAs), Health Flexible Spending Accounts (FSAs), and Health Reimbursement Arrangements (HRAs). The IRS in verbal comments, to clarify their position, stated they are stopping the pre-tax (tax-free) purchase of individual health policies by an employee, and employers without group health insurance or self-funded group health plans can essentially no longer have a Health Flexible Spending Account (Health FSA) or Health Reimbursement Arrangement (HRA).

Because of these new changes our goal is to create an easy to read guide for your review.

http://benefitblog.com/2013/changes-to-regulations-affecting-renewing-plans/#comment-3282

[Jack from Ohio]

By Ric Joyner, CEBS, GBA, RPA, CFCI

On September 13, 2013 the IRS changed the rules with Notice 2013-54 for Premium Reimbursement Arrangements (PRAs), Health Flexible Spending Accounts (FSAs), and Health Reimbursement Arrangements (HRAs). The IRS in verbal comments, to clarify their position, stated they are stopping the pre-tax (tax-free) purchase of individual health policies by an employee, and employers without group health insurance or self-funded group health plans can essentially no longer have a Health Flexible Spending Account (Health FSA) or Health Reimbursement Arrangement (HRA).

Because of these new changes our goal is to create an easy to read guide for your review.

http://benefitblog.com/2013/changes-to-regulations-affecting-renewing-plans/#comment-3282

One more roadblock...

[NECPA in NEBRASKA]

This doesn't seem fair to small businesses, such as myself that don't have access to a group health plan. I have a couple of clients with no employees that are corporations that this will hurt, not to mention my own MERP is apparently useless. I am thinking of killing my corporation so that I can at least, use the self-employed health insurance route. I've been reading various blogs and am not finding much that says anything that will be helpful. This is not a political post, I'm just confused, because I didn't see this coming at all. It will make a huge difference to what I pay in income taxes, especially with the 7.5% to 10% increase in AGI for medical. If anyone knows of anything that will help small business, please PM me or post it here. The company that I know that administers medical plans, etc. is still studying the new law and hasn't come out with any announcements. I am assuming that this will affect all of the farm plans, etc.

Thanks!

[Lee B]

Do you interpret this to mean that S Corp owners will no longer be able to reimburse themselves for their own health

insurance premiums includable in W -2 Box 1 wages, then deductible at the bottom on page 1 of Form 1040 ?

[NECPA in NEBRASKA]

That is pretty much how it reads to me, unless it is a group help plan. I may be wrong, but I believe that is what it is saying for individual plans. I hope that I'm misinterpreting it, because I'm hearing as much feedback as I would expect. I have googled it and have gone to various websites, such as BASE, etc. to see their take on the law. All I know is that they keep talking about stand alone plans not being able to be used for individual policies. I'm surprised that there is not more of an uproar, so I hope that I am crazy.