Bad news for companies that reimburse workers for tax free health insurance

2013-11-11-18_20_50-300x287Employers will owe a $100-a-day excise tax per employee, according to IRS,
which just issued guidance to clear up confusion over the tax treatment of these plans.
Many small companies have set up plans to reimburse premiums paid by employees
for individual policies or for coverage purchased on an exchange. Unfortunately,
the Revenue Service says these arrangements violate the new health reform rules
and trigger the excise tax. Right now, the agency hasn’t indicated how strict it will be
in levying the penalty. If the premium reimbursement is done on an after-tax basis,
that arrangement generally is not subject to the excise tax, in the Service’s view.