Irish and Northern Irish companies with employees in the US need to read this update and take immediate action if needed. And I’m not just writing that because I’m the proprietor of this blog!
Some Irish and Northern Irish employers reimburse certain US-based employees for premiums paid for individual health insurance policies (whether sold in the marketplace or sold through a State Exchange), or directly paying the employee’s individual premiums to the carrier. That reimbursement/payment is prohibited by the US Internal Revenue Service effective July 1, 2015.
The IRS will allow payment of additional compensation which could be used to pay premiums, but the compensation cannot be fettered to the payment of premiums. There is a heavy excise tax on the employer for violations–$100 per day per affected employee per year. This prohibition arises under the 2010 Affordable Care Act.
My partners Warren Kingsley and Doug Smith have written an update on this issue, available at http://www.agg.com/prohibited-employer-health-insurance-premium-reimbursement-arrangements–immediate-action-required-05-19-2015/. If you have questions about the impact of this on your US operations, contact me directly (my contact information is on the right-hand column of the blog’s homepage https://irishexportinsights.com/.