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Frequently Asked Questions

One Employee HRA

Limited Purpose HRA

Multi-Employee Plan with Group Insurance

No Limit Plan

   

ONE EMPLOYEE HRA

Q. Is my Plan subject to all of the regulations and changes due to the Patient Protection and Affordable Care Act (PPACA); i.e., Healthcare Reform?

A. No. A One Employee HRA is EXEMPT for most PPACA regulations.

Q. Why aren't S-Corporation owners protected by TASC's Deduction Guarantee?

A. While S-Corporation owners can still benefit from an HRA (especially if they have a significant amount of out-of-pocket medical expenses), they do not realize as big of a benefit or experience as large of a tax deduction from an HRA as other business entities. They will receive FICA or self-employment tax deductions on their out-of-pocket medical expenses only.

Q. Does my adult child need to be covered by my medical insurance in order for me to pay and deduct the medical expense on my HRA?

A. Any out-of-pocket expenses associated with your dependents can be taken as a tax deduction on your HRA regardless of whose health insurance plan they’re on.

Q. Is there a list of eligible expenses that TASC could provide?

A. TASC has generated a list of items that are considered eligible expenses with AgriPlanNOW and BizPlanNOW (www.tascmicrobusinessnews.com). However, this is NOT a comprehensive list. For a current list of allowable items/expenses, visit the IRS.gov website and view Publication 502 Medical and Dental Expenses (pdf). If still in doubt, enter the expense on the transmittal. We will adjudicate it at the end of the year when you submit your list of expenses to TASC.

Q. How does the TASC Card work?

A. Complete a TASC Card Enrollment form. A Participant can use the card for any eligible medical expense. The card differentiates between expenses that are eligible and those that are not. When purchasing an eligible item, the card is swiped; TASC fronts the money (up to $1,000) and pays the merchant. Within 5 business days, you will receive an email notifying you that funds will be taken from your business checking account for that expense. The transaction will occur shortly thereafter. The TASC Card is not a credit card; it is a DEBIT card. Benefits of using the card include...

  • Automatically qualifies expenses at point of sale
  • Eliminates the need to reimburse the employee for medical expenses
  • Pre-populates the transmittal (online and paper) for end of year submissions

Q. Is the TASC Card a credit card?

A. No. The TASC Card is a debit card. An Automatic Clearing House (ACH) transaction occurs within 5 business days of the point of sale. TASC draws funds from the Client’s business checking account after notifying him/her via email of the transaction.

Q. How much does the TASC Card cost?

A. The TASC Card is free with your Plan. There is no charge tied to it. Dependent cards are also available for a spouse or child.

Q. Can I pay my spouse with commodity wages?

A. Yes and no. You must pay at least a minimal W-2 wage (in addition to any commodity wages) to your spouse or employee in order be protected by TASC's Audit Guarantee.

Q. Can a greater than 2% S-Corporation shareholder participate in a One Employee HRA?

A. Yes; however, the savings will be limited to FICA/Medicare — or 15.3% of out-of-pocket medical expenses. If the shareholder has a significant amount of out-of-pocket medical expenses, a BizPlanNOW is still a good investment. A 2% shareholder or greater will be required to add the AgriPlanNOW and BizPlanNOW employee benefit amount to Box 1 (wages, tips and other compensation) of their employee W-2; however, this amount will be deducted from Boxes 3 (Social security wages) and 5 (Medicare wages and tips).

Q. Am I required to have health insurance?

Yes. The Patient Protection and Affordable care Act (PPACA) generally requires individuals, with limited exceptions, to maintain minimum essential coverage or pay a penalty with their annual federal income tax return. The annual penalty will be the greater of a flat dollar amount ($325 in 2015; $695 in 2016) or a percentage of taxable income (2% in 2015; 2.5% in 2016).

 

MUTLI-EMPLOYEE PLAN WITH GROUP INSURANCE

Q. Can I continue to offer a BizPlanNOW Section 105 HRA? I am employer who sponsors Group insurance.

A. Yes! IRS Notice 2013-54 disallowed offering a stand-alone HRA or an HRA that is not integrated with Group insurance. Because you offer Group insurance, the only difference is that you will have to limit enrollment to employees who are enrolled in your Group Health Plan, or who certify they are covered under Group insurance sponsored by another employer (their spouse's Plan).

Q. I have downloaded, completed and distributed your ERISA Compliance Feature Pack forms to my Plan Participants. Can I safely assume that I would pass a Department of Labor Audit (DOL)?

A. NO! Employers who sponsor Group insurance or any Group-sponsored health and welfare benefit have much more stringent reporting requirements. For example, if you sponsor a Group dental plan in addition to your HRA, you will need a Wrap Document that ties each of the compliant Summary Plan Descriptions together into one document. Failure to comply to any of the ERISA or DOL requirements could lead to hefty fines and penalties. TASC has you covered with its Microbusiness Compliance Suite. If elected, these services will incur an additional fee. Please contact your TASC Provider or a Microbusiness Specialist to learn more.

Q. Do I need to submit a 1094-B Transmittal Form and 1095-B Individual form for each covered employee?

A. No. For fully-insured health plans this responsibility lies with the insurance carrier.

Q. Do I have to submit IRS Excise Tax Form 720 and pay an annual PCORI fee?

A. Yes. PPACA requires you to pay a minimal per participant ($2.17 per participant in 2015) annual fee to help finance the Patient-Centered Outcomes Research Institute. This PCORI fee will need to be recorded on IRS Excise Tax Form 720 and paid by July 31st of the calendar year immediately following the last day of the Plan year. TASC will assist by providing you with a completed IRS Excise Tax Form 720 and instruction.

Q. What is a Summary of Benefits and Coverage? Is this the same as a Summary Plan Description?

A. A Summary of Benefits and Coverage (SBC) is a uniform explanation of coverage that is now required by the Departments of Treasury, Labor and Health & Human Services. No, It is not the same as a Summary Plan Description. TASC provides you with fillable SBC and SPD documents that you can download, complete and distribute.

 

LIMITED PURPOSE HRA

Q. I am an employer who does not sponsor Group insurance. Can I still offer my employees some form of benefit?

A. Yes. A Limited Purpose HRA provides coverage for dental, orthodontia, vision and long-term care benefits only. These are considered excepted benefits and can be offered whether you offer Group insurance or not.

Q. Can I still provide my Plan participants with the TASC Card if my Plan is a Limited Purpose HRA?

A. Yes; however, TASC has no way to limit your employees' reimbursement to only dental and vision services via the TASC Card. This is something that you as the employer will have to monitor.

Q. Do I have to submit IRS Excise Tax Form 720 and pay an annual PCORI fee?

A. Yes. PPACA requires you to pay a minimal per participant ($2.17 per participant in 2015) annual fee to help finance the Patient-Centered Outcomes Research Institute. This PCORI fee will need to be recorded on IRS Excise Tax Form 720 and paid by July 31st of the calendar year immediately following the last day of the Plan year. TASC will assist by providing you with a completed IRS Excise Tax Form 720 and instructions.

Q. Do I need to submit a 1094-B Transmittal Form and 1095-B Individual form for each covered employee?

A. No. ACA Minimum Essential Coverage Reporting applies to employers who provide health coverage. For Group-insured health Plans, this responsibility rests with the employer.

Q. Can an S-Corporation owner actively participate in a Limited Purpose HRA?

A. Yes.

Q. I run a small farm (less than 50 employees) with a mix of full-time and part-time workers. Am I required to offer coverage?

A. No, there is no requirement for small employers to offer health benefits to their workers.

 

NO LIMIT PLAN

Q. I have a non-family member employee. Would you recommend this tax-advantaged benefit for my business?

A. No, TASC would not recommend the No Limit Plan for an employer who has non-family member employees. This Plan was specifically developed for family-owned and operated businesses. There is no limit to the amount of claims submitted. The risk to this type of Plan design is the potential of receiving a high amount of medical claims, written off through your business, in any given year.

Q. Do I need to submit a 1094-B Transmittal Form and 1095-B Individual form for each covered employee?

A. Yes, this responsibility rests with the employer for self-insured Plans. Employers are required to submit a 1094-B Transmittal Form and 1095-B Individual Forms for each covered employee to the IRS by February 28th, or March 31st if filing electronically. (For Group-insured health Plans, this new requirement lies with the insurance carrier.)

In addition, you must distribute IRS Form 1095-B to affected employees by January 31st. Employees will use this form when completing their own individual income tax returns as proof of health insurance coverage for the prior calendar year. Under new Healthcare Reform rules, an individual can be fined for any month they fail to maintain health coverage.

To help ensure the compliance of your Plan, TASC will provide you with instruction and access to these fillable tax forms at the end of each calendar year.

Q. Do I have to submit IRS Excise Tax Form 720 and pay an annual PCORI fee?

A. Yes. PPACA requires you to pay a minimal per participant ($2.17 per participant in 2015) annual fee to help finance the Patient-Centered Outcomes Research Institute. This PCORI fee will need to be recorded on IRS Excise Tax Form 720 and paid by July 31st of the calendar year immediately following the last day of the Plan year. TASC will assist by providing you with a completed IRS Excise Tax Form 720 and instruction.

Q. What do I have to do to be compliant with ERISA?

A. Download, complete and distribute TASC's ERISA Compliance Feature Pack forms to your Plan Participants. Follow direction in the booklet and you should be good to go unless you sponsor a Group health and welfare benefit (i.e., a Group-sponsored Dental Plan).

Employers who sponsor Group insurance or any Group-sponsored health and welfare benefit have much more stringent reporting requirements. For example, if you sponsor a Group Dental Plan in addition to your HRA, you will need a Wrap Document that ties each of the compliant Summary Plan Descriptions together into one document. Failure to comply to any of the ERISA or DOL requirements could lead to hefty fines and penalties. TASC has you covered with its Microbusiness Compliance Suite. If elected, these services will incur an additional fee. Please contact your TASC Provider or a Microbusiness Specialist to learn more.

Q. Can I pre-establish a limit for non-insured or out-of-pocket medical expenses?

A. No. The reason this Plan is compliant with Healthcare Market Reform regulations is because we have removed the limit on the amount of out-of-pocket medical expenses that can be reimbursed through the business. All insurance premiums and unlimited out-of-pocket medical expenses are eligible to be reimbursed.

Q. Is the No Limit Plan an HRA?

A. No. The No Limited Plan is technically a self-funded Plan. It is a "modified" HRA in that it works in the same manner as an HRA; however the limit on insurance premiums and out-of-pocket medical expenses has been removed.

Q. What other compliant tax-advantaged options do I have if I don't sponsor Group insurance and I have non-family member employees?

A. You could offer a Limited Purpose HRA or a Section 125 FlexSystem Non-Employer Sponsored Premium (NESP) and/or Non-Excepted Flexible Spending Account (NEFSA). The NESP allows employees to purchase their own individual insurance policy and make pre-tax contributions into a reimbursement account to pay for these non-employer sponsored premiums. The NEFSA is a health Flexible Spending Account where both employer and employees can contribute pre-tax dollars to pay for the employee's out-of-pocket medical expenses. To learn more, contact a TASC Microbusiness Specialist at 888-595-2261 Ext. 17732

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