Health "insurance" reform legislation, the Affordable Care Act (ACA), was signed into law March 23, 2010 and provides the most sweeping changes we have seen to health insurance in the United States.  Now that the entire ACA has passed constitutional muster by the Supreme Court, small business owners need to familiarize themselves with ACA provisions that directly impact their bottom-line.

Today, the Supreme Court issued an opinion related to health care reform. A divided Supreme Court upheld the constitutionality of the Obama administration's health-care law. The court said Congress was acting within its powers under the Constitution when it required most Americans to carry health insurance or pay a tax. Chief Justice Roberts' vote saved the ACA.

The following post is adapted from a Linked-In Answer that I responded to last month via the Linked-in Answers Tool.  It received "Best Answer", so I thought I'd share it on the employee health benefits blog. The question was what motivates you to provide employee benefits?

Today, many small businesses are canceling group health insurance coverage due to cost, participation and administrative hassle.  When a business cancels its group health insurance policy, the employees not only lose their health insurance, but they also lose the tax advantages associated with employer-based premium contributions.

Recently, the IRS issued proposed regulations on the comparative effectiveness research fees required by the Affordable Care Act (ACA).  While the ACA may be struck down any day by the Supreme Court, if it stands, HRA Plans may be subject to the proposed research fee rules. Read on for a quick guide on how the research fees will currently be applied to health reimbursement arrangements (HRAs).

The Supreme Court is set to rule on the consitutionality on the health reform bill, or Affordable Care Act (ACA), in the next few days (June 21-25). So, in yesterday's webinar, The History and Future of Small Business Health Insurance, Professor Paul Zane Pilzer outlined 4 possible outcomes for the Supreme Court Ruling. Which option do you think is most likely? Tell us in the comment section.

A common question we receive at Zane Benefits is: "Can I Offer a Health Reimbursement Arrangement (HRA) to 1099 Contractors?"

MERP stands for Medical Expense Reimbursement Plan and is any plan or arrangement under which a business reimburses an employee for out-of-pocket medical expenses incurred by employees or their dependents.  If administered correctly, all reimbursements are paid to the employee 100% tax-free. A MERP is not a Section 125 Plan, Cafeteria Plan, or Flexible Spending Account.  Rather, it is a Section 105 Plan.

Many businesses might think that getting their employees involved in wellness is not part of their business. Wrong. The health of their employees affects their profit in three ways: (1) Healthy employees are often the most productive employees. (2) Unhealthy and employees who smoke are often the least productive. (3) The cost of health benefits for health insurance (i.e. sickness care) now exceeds profits for most large businesses. Moreover, busy employees typically look to their employer for their health benefits, and they expect any treatments to keep them healthy to be offered and paid for by their employer.

A Section 105 plan allows businesses to reimburse an employee for medical and insurance expenses incurred by the employee or his or her dependents. The most common type of
Section 105 plan is a self-funded (or self-insured) health plan, where the employer has chosen to self-fund (or self-insure) health benefits rather than pay premiums to an insurance company. Section 105 plans are also frequently found in the form of Health Reimbursement Arrangements (HRAs).  A businesses might also implement a Section 105 plan alongside a conventional employer-sponsored health insurance plan (to reimburse amounts not covered by insurance) or as a stand-alone medical reimbursement plan (to reimburse amounts for out-of-pocket health insurance premiums). 

What else can be done to improve U.S. health insurance? Major pieces of legislation have already been passed to allow (1) tax-deductible employer-reimbursed individual health insurance and (2) high-deductible health insurance with Health Savings Accounts. Additionally, some experts believe the Affordable Care Act (ACA) makes the most changes to the health insurance industry since World War 2. Here are 4 controversial ways to further ensure better health insurance for every American at less cost.

Many employers that self-administer an HRA often overlook important compliance obligations that put them at financial risk. Failure to comply with the minimum HRA administration requirements is common and can be costly.  And, if an employer does take the extra steps to fully comply, the administrative cost will likely outweigh the HRA Benefits.