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IRS Tax Credit Guidelines For HSAs, HRAs And Wellness May Penalize Employers


  01:05:24 pm, by MedBen5   , 199 words,  
Categories: News, Wellness, Health Plan Management

IRS Tax Credit Guidelines For HSAs, HRAs And Wellness May Penalize Employers

Income tax credit guidelines for state-run insurance exchanges, released earlier this month by the IRS for eligible individuals, may also have a bearing on their employers. As the Benefit Blog notes, “any full-time employee who obtains such a credit may cause a ‘large employer’ (one with 50 or more full-time employees) to owe a penalty under the [Affordable Care Act]’s ‘play-or-pay’ provisions".

The proposed guidelines apply to contributions employers make to health savings accounts (HSAs) or health reimbursement arrangements (HRAs) as well as financial incentives given to employees who satisfy the requirements of a wellness program. Specifically, they spell out whether such plan-related payments fall under the pay-or-play rules.

For an employee to qualify for the tax credit, the health plan offered by the employer must either not be “affordable” (because the employee’s share of the premium for employee-only coverage would exceed 9.5% of his or her income) or fail to provide at least “minimum value” (by covering the cost of at least 60% of “essential health benefits”).

The Benefit Blog summarizes the IRS guidance:

MedBen clients with questions regarding this or any ACA provisions regarding employer-sponsored plans may contact Vice President of Compliance Caroline Fraker at

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