Is this practice allowed?
In the past, some employers have reimbursed employees for the cost of medical insurance the employees purchased through the individual market. The reimbursements were made pretax. In this way, the employer sought to provide health coverage to their employees without establishing a group health plan.
Is this still allowed under the Affordable Care Act?
No! As of January 1, 2014, this practice is no longer permitted.
We strongly advise that you contact your employee benefits advisor or us with any questions or concerns you may have with this change!