HSA Family Maximum Contribution for 2018 to Remain at $6,900
On April 26, 2018, the IRS announced (through Rev. Proc. 2018-27) that the 2018 HSA maximum family contribution is reverting back to the original $6,900. As reported in the March 6, 2018, edition of Compliance Corner , the IRS had previously announced a decreased limit of $6,850 (Rev. Proc. 2018-18).
In restating the original limit of $6,900, the IRS shared many reasons for the decision, including taxpayer complaints that the $50 limit reduction imposed "numerous unanticipated administrative and financial burdens" for those that had already maxed out their contributions before the reduction was announced, and administrators who had to modify their systems to reflect the reduction. Most interestingly, some stakeholders had pointed out the fact that Section 223 of the IRC requires the IRS to publish the annual inflation adjustments by June 1 of the preceding calendar year.
As a result of the new announcement, HSA eligible individuals with family coverage may now contribute up to $6,900 for 2018. Employers wanting to take advantage of the increased limit will need to make the appropriate adjustments in their payroll and benefits administration systems, if they had previously change the systems to reflect the $6,850 limit.
A further complication comes with the new announcement: Some employees had already maxed out the $6,900 before the March 5, 2018, reduction announcement. To help the employees avoid the 6 percent excise penalty tax for excess contributions, the employers already completed the corrective action of distributing the excess $50. Now, with the limit back at $6,900, that $50 is no longer considered an excess contribution. If the $50 was associated with employer contributions or employee pretax contributions, it would now be considered a nonqualified distribution, subject to a 20 percent excise penalty tax (plus income tax). To avoid the tax, the employees will need to work with the employer and HSA bank/trustee to repay the $50 to the HSA. The repayment will need to take place by April 15, 2019. Again, this last complication only applies to those employees who maxed out their contribution prior to March 5, 2018, due to employer or employee pretax contributions and whose employers had already refunded the excess $50 to them.
Departments Issue Mental Health Parity Guidance, Including Proposed FAQs
On April 23, 2018, the DOL, HHS and Treasury (the Departments) released a number of documents concerning mental health parity compliance, including proposed FAQs. As background, the Mental Health Parity and Addiction Equity Act (MHPAEA) requires that the financial requirements and treatment limitations imposed on mental health and substance use disorder (MH/SUD) benefits be no more restrictive than the predominant financial requirements and treatment limitations that apply to substantially all medical and surgical benefits. MHPAEA also imposes several disclosure requirements on group health plans and health insurance issuers.
In addition to releasing proposed FAQs About Mental Health and Substance Use Disorder Parity Implementation and the 21st Century Cures Act Part 39, the Departments also released a model Mental Health and Substance Use Disorder Parity Disclosure Request form, a MHPAEA self-compliance tool, the 2018 Report to Congress (entitled Pathway to Full Parity), the 2017 MHPAEA enforcement fact sheet and an action plan for enhanced enforcement. See below for a recap on each of those resources.
FAQs About Mental Health and Substance Use Disorder Parity Implementation and the 21st Century Cures Act Part 39
These FAQs provide additional guidance to employers and individuals about the application of the law. Here are some highlights of the 12 FAQs provided in this document:
- FAQ 1 indicates that the Departments are releasing an updated draft model disclosure form, which individuals would use to request information pertaining to their plan's mental health benefits. The draft form was updated after the Departments received a number of comments on the original draft (which was released in 2017). The Departments are also requesting comments on the updated form, which must be submitted by June 22, 2018.
- FAQs 2-10 address different nonquantitative treatment limitation (NQTL) issues, including experimental limitations, prescription drug limitations, step therapy, reimbursement rates for physicians and non-physicians, network adequacy, medical appropriateness and emergency room care of acute conditions.
- FAQs 11-12 discuss medical health provider directories and the requirement to provide participants with an up-to-date list of network providers. Employer plan sponsors are allowed to provide a link to the list as long as they comply with the DOL's electronic disclosure safe harbor.
Model Mental Health and Substance Use Disorder Parity Disclosure Request Form
The Departments provided this form as an example of a MHPAEA disclosure request form. Participants can use this form to request information from their employer-sponsored health plan or insurer regarding MH/SUD limitations or denials in benefits.
This MHPAEA self-compliance tool is designed to assist employers in determining if their plan is compliant with MHPAEA's requirements. The tool prompts employers to ask themselves a series of questions about mental health parity requirements and provides compliance tips along the way. This tool is similar to the DOL's self-compliance tool for Title VII.
Pathway to Full Parity Report
This 2018 report to Congress outlines the various MHPAEA enforcement actions that were taken by the Departments in the last few years.
Pathway to Full Parity Report »
2017 MHPAEA Enforcement Fact Sheet
This fact sheet highlights the MHPAEA enforcement results pursued by the DOL. It specifically breaks down the number of cases concerning MHPAEA violations and discusses some of the results achieved through the DOL's voluntary compliance program.
Notably, the DOL reviewed 187 plans for compliance with MHPAEA, and 92 of those plans were cited for violations of MHPAEA. Additionally, the DOL's benefits advisors addressed 127 public inquiries related to mental health parity.
Action Plan for Enhanced Enforcement
This report discusses the planned actions following the Departments' public listening session (in July 2017) and the solicitation and receipt of comments on MHPAEA enforcement in 2017. It also discusses the Departments' recent and planned actions to maintain momentum on parity enforcement.
CMS Issues 2019 Medicare Part D Benefit Parameters
On April 2, 2018, CMS issued an announcement regarding the Medicare Part D benefit parameters for 2019. As background, employer plan sponsors that offer prescription drug coverage to Part D-eligible individuals must disclose to those individuals and to CMS whether the prescription plan coverage is creditable or non-creditable (as compared to Part D coverage). For coverage to be considered creditable, the actuarial value of the employer's coverage must be, on average, at least as good as standard Medicare prescription drug coverage.
In the announcement, CMS released the following parameters for the defined standard Medicare Part D prescription drug benefit, which will assist plan sponsors in making that determination:
- Deductible: $415 (a $10 increase from 2018)
- Initial coverage limit: $3,820 (a $70 increase from 2018)
- Out-of-pocket threshold: $5,100 (a $100 increase from 2018)
- Total covered Part D spending at the out-of-pocket expense threshold for beneficiaries who are not eligible for the coverage gap discount program: $7,653.75 (a $145 increase from 2018)
- Estimated total covered Part D spending at the out-of-pocket expense threshold for beneficiaries who are eligible for the coverage gap discount program: $8,139.54 (a $278.06 decrease from 2018)
Minimum copayments under the catastrophic coverage portion of the benefit:
- $3.40 for generic/preferred multisource drugs (a $.05 increase from 2018)
- $8.50 for all other drugs (a $.15 increase from 2018)
Employer plan sponsors will use these parameters to determine whether the plan's prescription drug coverage is creditable for 2019. This information is necessary in order to provide the required disclosure to Medicare Part D-eligible individuals and also to CMS. As a reminder, the annual participant disclosure requirement can be satisfied by sending a single notice at the same time each year prior to October 15, but may also be required at other times (e.g., to newly eligible participants, upon a change in the plan's creditable coverage status or upon request from a Medicare Part D-eligible individual).
IRS Issues Additional Guidance Related to 401(k) Hardship Distribution and Child's Student Loan
On March 30, 3018, the IRS published Informational Letter 2018-0001, which responds to an inquiry as to why a 401(k) hardship distribution could not be made to pay off a child's college student loan.
In the letter, which is a response to a Congressional inquiry, the IRS explains that 401(k) plans are intended for employees to contribute part of their pay toward retirement. To help ensure that funds in the plan are available at retirement, early withdrawals from a 401(k) plan are allowed only in cases of hardship.
As background, a 401(k) retirement plan may, but is not required to, provide for hardship distributions. The 401(k) regulations provide that a hardship distribution can only be made if the employee (or spouse or dependent) has an immediate and heavy financial need and the distribution is necessary to satisfy the financial need. If a 401(k) plan provides for hardship distributions, it must provide the specific criteria used to make the determination of hardship. For example, a plan may provide that a hardship distribution can be made only for medical or funeral expenses, but not for the purchase of a principal residence or for payment of tuition and educational expenses.
In the response, the IRS highlights that the "payment of tuition, related educational fees, and room and board expenses, for up to the next 12 months of post-secondary education" is a permissible hardship under the 401(k) regulations. However, paying off student loans would not qualify, because it's not payment for the next 12 months of post-secondary education. The letter concludes with the possible alternative of getting a loan from the plan. A loan, unlike the hardship distribution, would be tax-free, and the participant could have up to five years to repay it.
Please note: IRS Information Letters are generally advisory and have no binding effect on the IRS. For employers, the IRS letter serves as a good reminder that the intent of a 401(k) plan is to help an employee make payments toward retirement. If a 401(k) plans allows for hardship distributions, the plan operations should strictly align with the plan terms so that the intent of the 401(k) plan may be preserved.
Who's eligible to participate in an HRA, and for whom can HRA reimbursements be used?
Generally speaking, employees and former employees may participate in an HRA. If the HRA is a general-purpose HRA for active employees, the ACA requires that the HRA be integrated with group health coverage. Very generally, "integrated" means that the HRA covers expenses relating to the group coverage (i.e., deductibles, co-insurance, etc.). The participating employees must be enrolled in a group health plan (either directly through the employer or through outside coverage, such as through a spouse's employer). If the HRA is a limited-purpose (reimburses only dental and/or vision expenses) or a stand-alone retiree-only HRA, it isn't subject to the ACA (and therefore doesn't have to be integrated with group coverage). So, an employer could make all former employees eligible for a retiree-only HRA (even if they didn't have group coverage).
Because HRAs are only for employees or former employees, self-employed individuals are generally not eligible to participate in an HRA. A self-employed individual includes a sole proprietor, partner in a partnership (sometimes also called a "K-1 earner") and a more-than-2% S corporation shareholder. For LLCs, if the LLC is taxed as a partnership, the owners will generally be considered self-employed. On the other hand, if the LLC is taxed as a corporation, and for C corporation owners, the owner may participate as long as they are otherwise treated as an employee (i.e., receive W2 income).
As for distributions from the HRA, employees and former employees may use HRA funds to pay or reimburse medical expenses of their federal tax dependents. That generally includes a spouse and a child (step/adopted child included). Expenses for children can be reimbursed up until the end of the year in which the child turns age 26, regardless of whether the child is a tax dependent of the employee. A "child" may also include an eligible foster child (one placed by an authorized agency or by judgment or other decree/order of a court). An employee may use HRA funds for a domestic partner's expenses only if the domestic partner is the federal tax dependent of the employee.
Employers are generally free to determine eligibility and restrict distributions to certain expense types (such as a dental/vision-only HRA) as they see fit. Because an HRA is considered self-insured and therefore subject to the Section 105 nondiscrimination rules, employers shouldn't favor their more highly compensated individuals (such as a management or executive group) in their HRA eligibility and benefit/reimbursement design. Beyond that, employers should document eligibility and plan design in the related plan documents and communicate them to employees.
Please ask your advisor for a copy of our white paper HRAs and Other Employer Reimbursement Arrangements .
Extension of Non-ACA-Compliant Plans
On April 12, 2018, the Alaska Division of Insurance published Bulletin 18-07. The bulletin relates to another one-year extension to the transitional policy of non-ACA-compliant individual and small group policies and plans.
As background, on April 9, 2018, CMS issued guidance allowing extension of so-called "grandmothered policies" (i.e., non-ACA-compliant plans that have been continued since 2013), subject to state and carrier approval. Bulletin 18-07 represents Alaska's approval for such extension.
Bulletin 18-07 states that insurers have the option to renew non-ACA-compliant policies if coverage has been continuously in effect since Dec. 31, 2013. Those policies may continue to be renewed on or before Oct. 1, 2019, provided the policy will terminate by Dec. 31, 2019. Insurers may early renew or issue coverage for periods less than one year if a policy terminates prior to Dec. 31, 2019 and, in the case of a small group, if the employer wants coverage through the end of the calendar year.
The bulletin presents two options for insurers that elect to extend non-ACA policies. Under the first option, an insurer may permit employer-sponsored groups currently enrolled in the insurer's non-ACA-compliant plan to continue to renew their coverage. Under the second option, the insurer may provide an additional opportunity to renew coverage in its non-ACA-compliant plan to an employer-sponsored group that's currently enrolled in the insurer's non-ACA-compliant plan but has indicated its intent to not renew at the end of the plan year.
Alaska small employers that are interested in renewing a non-ACA-compliant plan should work with their advisors and insurers.
Extension of Non-ACA-Compliant Small Group and Individual Policies and Plans
On April 18, 2018, Indiana Insurance Commissioner Robertson released Bulletin 243, related to the extension of non-ACA-compliant small group and individual policies and plans. As background, on April 9, 2018, the federal government announced an additional transition policy that allows insurers (if allowed by the state) to renew non-grandfathered non-ACA-compliant plans (this transitional relief has been extended several times before). Such policies aren't required to be in compliance with certain ACA mandates, including community rating, coverage of essential health benefits, prohibition on pre-existing condition exclusions and the annual out-of-pocket maximum limit.
The bulletin states that Indiana will allow insurers to renew policies in the individual market and the small group market as long as the policy ends by Dec. 31, 2019, according to the extended transitional policy. Employers with non-ACA-compliant plans should work with their insurer and advisor on any policy extension.
Extension of Non-ACA-Compliant Small Group and Individual Policies and Plans
On April 19, 2018, Iowa Insurance Commissioner Ommen released Bulletin 18-01 related to the extension of non-ACA-compliant small group and individual policies and plans. As background, on April 9, 2018, the federal government announced an additional transition policy that allows insurers (if allowed by the state) to renew non-grandfathered non-ACA-compliant plans (this transitional relief has been extended several times). Such policies aren't required to be in compliance with certain ACA mandates, including community rating, coverage of essential health benefits, prohibition on pre-existing condition exclusions and the annual out-of-pocket maximum limit.
The bulletin states that Iowa will allow insurers to renew policies in the individual market and the small group market as long as the policy ends by Dec. 31, 2019, according to the extended transitional policy. Employers with non-ACA-compliant plans should work with their insurer and advisor on any policy extension.
Extension of Renewal for Grandmothered Plans
On April 18, 2017, the Maine Bureau of Insurance published Bulletin 428 (superseding Bulletin 420). According to the bulletin, the Bureau approves the renewal of non-grandfathered small group plans issued before Jan. 1, 2014 (so-called "grandmothered plans") for terms extending no later than Dec. 31, 2019.
As background, on April 9, 2018, CMS issued guidance allowing extension of grandmothered policies (i.e., non-ACA-compliant plans that have been continued since 2013), subject to state and carrier approval. Bulletin 428 represents Maine's approval for such an extension.
To be eligible for the extension, carriers must notify the bureau by May 31, 2018, whether or not they intend to renew grandmothered policies beyond Oct. 1, 2018. The notice must include the number of affected policies and whether the carrier requests discontinuance of any existing products before Dec. 31, 2019. In addition, grandmothered policies must be terminated or modified to be fully ACA-compliant by Jan. 1, 2020. For non-calendar-plan years, carriers may renew the policy early – on Jan. 1, 2019 – or may renew it on its anniversary date in 2019 for a short policy term.
In addition, and importantly for employers with grandmothered policies, carriers must provide 90 days' notice of transitional renewal or product discontinuance/modification to all grandmothered policyholders. That means any affected employers should receive at least 90 days' notice with respect to changes to their grandmothered plans.
Maine small employers that have grandmothered plans and are interested in renewing should work with their advisors and insurers.
Extension of Renewal for Grandmothered Plans
On April 16, 2018, the New Hampshire Insurance Department issued Bulletin INS-18-018-AB, which provides guidance related to transitional small group policies.
As background, on April 9, 2018, CMS announced that states would have the option to further extend renewal of transitional small group and individual policies for policy years beginning on or before Oct. 1, 2019, provided all policies end by Dec. 31, 2019. The non-grandfathered policies had to be in place prior to 2014. If the policy meets requirements, it's exempt from certain coverage mandates, including community rating, coverage of clinical trials and essential health benefits. Bulletin INS-18-018-AB represents New Hampshire's approval for the extension through 2019.
The bulletin explains that insurers in New Hampshire have the option of renewing such policies. However, state law requires that premium rates charged by an insurer be guaranteed for at least 12 months. Because federal law prohibits the extension of a policy period beyond 12 months, a policy in New Hampshire can only be renewed for a period of 12 months.
As was the case in 2017, the New Hampshire Insurance Department didn't fully adopt the extended transitional policy as contemplated by CMS. Rather, the transition period is only extended to policies that are renewed on or before Jan. 1, 2019. Policies renewing after Jan. 1, 2019 are required to be ACA compliant.
New Hampshire small employers that have non-ACA-compliant plans and are interested in renewing should work with their advisors and insurers.
Paid Sick Leave Law
On April 12, 2018, the New Jersey legislature passed S2171, known as the New Jersey Paid Sick Leave Act, which is a mandatory paid sick leave law applicable to all employers. Gov. Phil Murphy has announced his intention to sign the bill into law on May 2, 2018 to be effective 180 days after its execution.
Under the new law, employers, regardless of size, must establish a "benefit year" and allow eligible employees to accrue up to 40 hours of paid sick leave at a rate of one benefit hour per 30 hours worked. Eligible employees include those perform work within NJ, but doesn't include certain employees performing service in the construction industry that is under contract pursuant to a collective bargaining agreement, any per diem health care employees or public employees who are provided with full paid sick leave pursuant to another state law.
Employers that already offer paid time off (including, but not limited to, personal days, vacation days and/or sick days) will be compliant under the law, provided the accrual rate is at least as generous as described under the law, all eligible employees are provided leave and employees can use their earned sick time for the same permissible purposes (described below).
Unless the employer has already accrued sick time prior to the effective date of the law, sick leave will begin to accrue on the date that the law takes effect for employees hired and working before such date. Newly hired employees begin to accrue sick leave immediately upon starting a new job and may use earned sick time on the 120th day after the employee begins working.
Employees may use earned sick time for any the following reasons:
- Diagnosis, care, treatment of, or recovery from a mental or physical illness, injury or other adverse health conditions, or for preventative medical care of the employee
- Caring for a family member during diagnosis, care, treatment of, or recovery from a mental or physical illness, injury or other adverse health conditions, or for preventative medical care of the employee's family member
Absence(s) necessary due to the employee or employee's family member being a victim of domestic or sexual violence, if the sick leave is used for any of the following:
- Medical attention needed to recover from physical or psychological injury or disability caused by domestic or sexual violence
- Services from a designated domestic violence agency or other victim services organization
- Psychological or other counseling
- Other legal services, including obtaining a restraining order or preparing for, or participating in, any civil or criminal legal proceeding related to the domestic violence or sexual violence
- Time needed after the closure of the employee's workplace or the school/place of care for the employee's child by order of a public official or other public health emergency, or if a public health authority issues a determination that the presence of the employee or their family member would jeopardize the health of others
- Attending a school-related function of the employee's child requested or required by the school responsible for the child's education, or attending a meeting concerning the care provided to the child in connection with the child's health conditions or disability
Employers may require an employee to provide advance notice to use sick leave (if foreseeable), but not more than seven calendar days. Notice should include the date the leave is set to begin and the expected duration. If unforeseeable, employees must give notice as soon as practicable. If the sick leave is of three or more consecutive days, an employer may require that employees provide reasonable documentation that their leave time is for a permitted purpose under the law. Any information concerning the health or domestic or sexual violence of an employee or their family member will be confidential and shall not be disclosed, except to the affected employee or with written permission of the employee.
The law includes recordkeeping and notification requirements. Specifically, employers must keep employee records of hours worked and sick leave taken for a period of five years, and those records must be made available for review upon request by the NJ Department of Labor. The department will develop a notice that the employer must post in the workplace. The employer must also give a copy of this notice to employees within 30 days of the notice being drafted and provided to new hires as well as upon any employee's request.
With regard to penalties, the law provides for a private right of action by an aggrieved employee and includes (but is not limited to) liquidated damages equal to the actual damages sustained by an aggrieved employee (i.e., wages multiplied by two).
The law expressly prohibits towns and cities from enacting ordinances regarding earned sick leave and preempts the previous municipal ordinances in existence prior to the law. When the law is signed, New Jersey will become the tenth state to require some form of paid leave.
Because it's anticipated that this law will be signed, New Jersey employers should review their sick leave and paid time off policies to ensure compliance with the new law. Employers with specific questions should work with outside counsel, particularly since the law relates to employer leave policies, which can involve issues outside the employee benefits realm.
Extension of Non-ACA-Compliant Small Group and Individual Policies and Plans
On April 20, 2018, Ohio Superintendent of Insurance Froment released Bulletin 2018-03 related to the extension of non-ACA-compliant small group and individual policies and plans. As background, on April 9, 2018, the federal government announced an additional transition policy that allows insurers (if allowed by the state) to renew non-grandfathered non-ACA-compliant plans (this transitional relief has been extended several times). Such policies aren't required to be in compliance with certain ACA mandates, including community rating, coverage of essential health benefits, prohibition on pre-existing condition exclusions and the annual out-of-pocket maximum limit.
The bulletin states that Ohio will allow insurers to renew policies in the individual market and the small group market as long as the policy ends by Dec. 31, 2019, according to the extended transitional policy. Employers with non-ACA-compliant plans should work with their insurer and advisor on any policy extension.
Maximum Annual Benefit for Autism Coverage
On April 21, 2018, the Pennsylvania Insurance Department issued Notice 2018-04, announcing the 2019 maximum benefit adjustment for autism spectrum disorders coverage. As background, group health insurance policies issued in Pennsylvania must provide coverage for the diagnostic assessment and treatment of autism spectrum disorders for covered participants under age 21. The coverage is subject to a maximum annual benefit, which has been increased to $40,501 for policies issued or renewed on or after Jan. 1, 2019, up from $39,668 for 2018.
"Small Employer" Redefined and Extension of Renewal for Non-ACA Compliant Plans
On April 19, 2018, the Utah Insurance Department published Bulletin 2018-2, which provides guidance to insurers that offer a health benefit plan or certified stand-alone dental plan in the individual or small employer market for the 2019 plan year. Among other things, this bulletin includes a new definition of "small employer" and an extension of renewal for non-ACA-compliant plans (also known as "grandmothered plans").
Small Employer Redefined. 2018 HB 39 updated the definition of "small employer." Under the new definition, a small employer is one who, with respect to a calendar year and to a plan year, employed at least one but not more than an average of 50 eligible employees on business days during the preceding calendar year. If the employer didn't exist for the entirety of the previous calendar year, reasonably expects to employ on average of at least one but not more than 50 eligible employees on business days during the current calendar year, employs at least one employee on the first day of the plan year, or has has common ownership with one or more other employers, the employer is treated as a single employer under 26 U.S.C. Sec. 414(b), (c), (m) or (o).
Transitional/Grandmothered Plan Extension. Bulletin 2018-2 allows an individual or small employer health insurer to renew and continue any grandmothered plans through 2019. The extension for 2019 mirrors the previous extensions by the commissioner in response to CMS guidance.
As background, on April 9, 2018, CMS issued guidance that allows the extension of grandmothered policies (i.e., non-ACA-compliant plans that have been continued since 2013), subject to state and carrier approval. Bulletin 2018-2 represents Utah's approval for such an extension of the transitional small group and individual policies for policy years beginning on or before Oct. 1, 2019, provided all policies end by Dec. 31, 2019. The grandmothered plans had to be in place prior to 2014.
An insurer may early renew coverage or issue coverage for a period other than 12 months if the transition policy terminates prior to Jan. 1, 2018. For any transitional policy renewed prior to Jan. 1, 2018, the policy may be renewed for a period through Dec. 31, 2019, with no increase of premium after such renewal.
For transitional plans with deductibles and out-of-pocket maximums on an accumulation period other than a calendar year, an insurer may not apply accumulation periods consisting of fewer than 12 months, even though the policy period may be less than 12 months. An accumulation period for a policy with non-calendar year deductibles and out-of-pocket maximums can be either:
- One accumulation period beginning at renewal month and extending through Dec. 31, 2019. For example, a transitional plan renewed Oct. 1, 2018, would have a 15-month accumulation period during which all claims would count toward the deductible and out-of-pocket maximum; or
- Two overlapping 12-month accumulation periods. For example, a transitional plan renewed Oct. 1, 2018, would have a 12-month accumulation period of Oct. 1, 2018, through Sept. 30, 2018, and an overlapping 12-month accumulation period of Jan. 1, 2019, through Dec. 31, 2019. Claims incurred during January through September would be carried over and counted toward the deductible and out-of-pocket maximum for both accumulation periods.
Utah employers that have grandmothered plans are are interested in renewing should work with their advisors and insurers.
Small Employer Definition Revised
On April 6, 2018, Gov. Northam signed SB 672 into law, which revises the definition of small employer for health insurance purposes. The term "small employer" continues to refer to an employer located in the Commonwealth that employed an average of at least one but not more than 50 eligible individuals on business days during the preceding calendar year and who employs at least one eligible individual on the date a policy becomes effective. The new law provides that the term "small employer" includes a self-employed person. An individual who is the sole shareholder of a corporation or sole member of a limited liability company, or an immediate family member of such sole shareholder or member, qualifies as an employee of the corporation or limited liability company if he performed any service for remuneration under a contract of hire for the corporation or limited liability company. Thus, a sole proprietor or other self-employed person – or their family member – may now qualify for a small employer plan.
This material was created by PPI Benefit Solutions to provide accurate and reliable information on the subjects covered but should not be regarded as a complete analysis of these subjects. It is not intended to provide specific legal, tax or other professional advice. The service of an appropriate professional should be sought regarding your individual situation. PPI does not offer tax or legal advice. "PPI®" is a service mark of Professional Pensions, Inc., a subsidiary of NFP Corp. (NFP). All rights reserved.
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Who's eligible to participate in an HRA, and for whom can HRA reimbursements be used?
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