Business Advisory Services

Healthcare Reform Advisory Services

The Patient Protection and Affordable Care Act (PPACA), also popularly referred to as “Obamacare” or “Healthcare Reform,” or simply “Affordable Care Act” (ACA), represents the most significant government expansion and regulatory overhaul of the U.S. healthcare system since the passage of Medicare and Medicaid in 1965.

WithumSmith+Brown’s Healthcare Reform Advisory Team is comprised of our most seasoned healthcare and tax professionals whose mission is to answer and address client questions and issues related to these regulations.

HRAT Alert

EMPLOYERS MAY BE SUBJECT TO PENALTIES UNDER THE AFFORDABLE CARE ACT FOR REIMBURSING EMPLOYEES FOR HEALTH INSURANCE

The Internal Revenue Service ("IRS") recently posted on its website, through a short two question and answer ("Q&A") format to caution to employers who are subject to the employer shared responsibility provision set forth in the Affordable Care Act ("ACA"). The IRS cautions these employers that they may be subject to penalties if they do not establish a health insurance plan for its employees and, subsequently, reimburse those employees for the premiums they paid for health insurance. This includes premiums paid for health insurance purchased within or outside the state marketplaces (exchanges). This strategy, commonly referred to as "dumping", was proposed by some employers as a cost effective way to shift rising health costs to the employees. The IRS has concluded that these arrangements are deemed to be group health plans subject to the new market reform provisions under the ACA and are also subject to the penalties for failure to meet those provisions.

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