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.