Zane Benefits is in the news again.
In case you missed it, the company was featured in a recent Forbes article as an expert in compliance requirements for small business health benefits under the new 21st Century Cures Act, which was passed in December.
In the article, Congress Eliminates Huge Penalties on Small Employers’ Health Insurance Reimbursement Arrangements, Zane Benefits President and CEO Rick Lindquist explains the difference between the new Small Business Health Reimbursement Arrangement (HRA) (compliant) and Employer Payment Plans (noncompliant).
Here’s an excerpt from the article, written by Forbes contributor Tony Nitti. You can click on the link above for the full story.
“I spoke with Rick Lindquist, President and CEO of Zane Benefits, a leading technology company that provides small business with HRA administration software, and he clarified the difference between an EPP and an HRA under the 21st Century Cures Act with an example:
Assume an employer has three employees: A, B, and C. The employer does not want to set up a group plan, but rather wishes for A, B, and C to be able to purchase insurance on the individual market on a tax-free basis. A's insurance premiums will cost $3,200, B's will cost $4,100, and C's will cost $4,800.
If the employer simply has A, B, and C present proof of the premiums and reimburses those amounts, while the reimbursements will be tax-free under Revenue Ruling 64-146, the employer will be subject to the $100, per employee, per day penalty.
Alternatively, the employer can ‘set up’ an HRA for the same three employees…and set aside $4,950 for A, B, and C. Each of the three employees can then withdraw the amounts necessary to pay their particular insurance premiums, and any excess amounts in the HRA can be used for other medical expenses. If this is done, not only do A, B, and C receive the amounts tax-free, but the employer is NOT subject to the Section 4980H penalty.”
Nitti concludes by urging readers to contact Zane Benefits to learn more about legally offering employees reimbursement for health insurance and other medical expenses.
Click here to read the full article.