This article answers the five questions of accounting to the reimbursement employee individual health insurance premiums, including how to pursue liability to minimize exposure and to manage the health benefits. 
overview of the reimbursement of employee individual health insurance premiums in 2015
As background to this accounting frequently asked questions, it is important to understand how employers their employees can report individual health insurance premiums.
In this type of health benefits, a set monthly amount to spend the company employees (a subsidy for health insurance) on their own health insurance. Employees can a policy by the health insurance purchase market, or directly from an insurance company through a broker, online etc.
Then a limited purpose § 105 medical reimbursement plan (like a premium refund plan) with., The company employees to stay for their qualified expenses
compatible refunded with various regulations, the plan is to officially meet certain requirements of the IRS, HIPAA, ERISA and ACA are administered:
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the agents have qualified health insurance refund premium expenses,
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expenses must be justified (usually by a receipt or invoice) and
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Each of an employee received amount to the employer must be returned to the actual expenditure.
5 Accounting FAQs for reimbursement of employee individual health insurance premiums
Here are the five most common questions and answers from accountants, CPAs, and accountants on the establishment, use and tracking premium refund (Note: These FAQs have acquired a firm with § 105 as a basis for their compensation plan). ,
FAQ # 1: Where the cumulative balances hold business? Have the money to a third party or create a separate account to keep track of the liability?
A send. Premium refund is a fictitious arrangement; an agreement to reimburse employees for their qualified expenditures under guidelines in the plan document. As such, there are no means to refund payments as expenses. Once a health insurance premium the employee was approved, refunds are paid via payroll. Most companies use premium refund software balances and reimbursements by to track in real time
FAQ # 2:.? As my accountant should keep track of the liabilities
A. believe incurred for fiscal purposes reporting companies generally a liability on their balance sheets for the portion of the unused contributions that they are ultimately used. Currently there is no specific accounting standards for recording or to place specially open to these types of liabilities. Conservative treatment is 100% of the unused contributions in the balance accrue
FAQ # 3:.? How can our company our commitment minimize
A. The company should look for a premium refund software vendors, reporting features and real-time monitoring of liabilities, refunds and use. These types of tools make tracking and minimizing exposure directly. Companies can change benefits at any time or cancel the entire advantage anytime. Furthermore stay any unused benefits with the company at the end of plan year, or when an employee leaves the company
FAQ # 4. What allows the IRC part to reimburse a company health insurance premiums [?
A. IRC § 105 allows employers health insurance premiums (http://www.law.cornell.edu/uscode/text/26/105).
FAQ # reimburse 5: Can a company self-administer refunds for employees individual health insurance premiums?
Some employers consider self-administer a premium refund plan without compatible software. However, may still be in compliance with regulations and healthcare reform costly, time consuming, and administrative expense for the employer. A major reason for compatible premium refund software is that many employers otherwise overlook important compliance obligations that bring them financially at risk.
errors, meet the following requirements for an employer to thousands of dollars per day in fines cost
- HIPAA privacy
- IRS rules
- ERISA rules
- Medicare Reporting
- legal plan documents
- COBRA
- Affordable Care Act (ACA) requirements
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