Warning: Opinion Piece.
Ric Joyner: Great post by a friend of mine…
On 9/13/13, the IRS (with the HHS and DOL) quietly issued Notice 2013-54 that closed the last option for private sector employees to use pre-tax dollars to purchase individual insurance and for small employers to contribute towards their employees individual health insurance. Yet, just a little over a month ago, the OPM determined that the government could contribute to congress and their staff through a 125 plan for the purchase of individual health plans.
PPACA and later regulations shut down the ability of employers to use 125 plans and even HRAs and FSAs to fund employees’ individual premiums. Now, for the first time since 1961, employers will NOT be able to contribute to their employees’ individual health premiums even through Premium Reimbursement Accounts. (see http://benefitblog.com/ for more information)
Unfortunately this comes at a time when many small employers (with less than 50 employees) will likely terminate their group insurance plans due to sky-rocketing small group premiums as well as the complex compliance requirements that the must meet if they do offer benefits.
Why should Congress and their staffs be able to use tax-free employer moneys and be able to pre-tax their portion of the contributions for individual insurance, when private individuals can not? Unfortunately, small employers and their employees do not yet know and agents and brokers are maxed out trying to keep up with these changes. The media needs to speak up so small employers know what has happened and can call their Congressmen to demand a level playing field before 2014!
Elena E. Merino
President/CEO, The Meridian Group, Inc.
Board Member, Atlanta Association of Health Underwriters