In FAQs about Affordance Care Act Implementation (Part XXII), the U.S. Department of Labor (the “DOL”) provides guidance on premium reimbursement arrangements.
This FAQ posits the following three questions:
Q1: My employer offers employees cash to reimburse the purchase of an individual market policy. Does this arrangement comply with the Affordable Care Act (“ACA”) market reforms?
Q2: My employer offers employees with high claims risk a choice between enrollment in its standard group health plan or cash. Does this comply with the ACA market reforms?
Q3: A vendor markets a product to employers claiming that employers can cancel their group policies, set up a Code section 105 reimbursement plan that works with health insurance brokers or agents to help employees select individual insurance policies, and allow eligible employees to access the premium tax credits for ACA Insurance Marketplace coverage. Is this permissible?
The DOL answers “NO” to each question. See the FAQ for details.