Speak with a Covered California certified agent! Call (888) 413-3164 or Shop Online Now

Shop and Compare

California Health Insurance Plans and Rates

It's easy. Just enter your zip code.

Covered California Q&A

Covered California and Obamacare related questions from consumers, employers and agents are answered by Phil Daigle with the best information available at the time. Archived entries may no longer be accurate as the Covered California and Obamacare knowledge-base is evolving quickly. TO REQUEST A PERSONAL RESPONSE INCLUDE EMAIL ADDRESS.

Pre-Tax Premium Reimbursement?

By on | 1 Comment

Question: In a recent post you said, “pre-tax premium reimbursement for employees is debatable”. What is the debate? I thought the IRS had ruled against it.

Answer: Here’s a link to the the question and answer you referenced. Currently, the pre-tax reimbursement for individual health insurance premiums can be accomplished by enacting a stand-alone Health Reimbursement Arrangement (HRA). However, as you pointed out, the Department of Labor ruled that under the ACA, employer-sponsored HRAs may not be integrated with individual market coverage or with an employer plan that provides coverage through individual policies. Why? Because “Section 2711 of the Public Health Service Act (PHS) as added by the ACA, generally prohibits plans and issuers from imposing lifetime or annual limits on the dollar value of essential health benefits”. The debatable part comes from some HRA administrators who believe that if an HRA is structured properly - no lifetime limits and no annual limits - they can still be used to provide tax advantages.

1 Comment

Thanks for answering someone’s recent question about pre-tax premium reimbursement. Our company had a consultant who sells some kind of HRA software come in, and he told us that in the ACA there is still a “loophole” that would allow employers with HRAs to reimburse for individual insurance if the HRA was structured as an FSA. Does that sound right to you? Our owner wants to drop coverage so that employees can get subsidies on the Exchange, but I am one of the few who wouldn’t qualify for a subsidy and am hoping that my company can kick in some pre-tax help on premiums.

Leave a comment

Do You Have California Health Insurance Questions?

Ask An Expert

View Previous Questions
Call Us at (888) 413-3164

© 2022 California Health Benefit Advisers, LLC
Home / About / Start Shopping / Ask a Question

“Covered California,” “California Health Benefit Exchange”, and the Covered California Logo are registered trademarks or service marks of Covered California, in the United States. This web site is owned and maintained by California Health Benefit Advisers, LLC, which is solely responsible for its content.