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To our policyholders in areas affected by the recent hurricanes, please know that the thoughts and prayers of everyone at Aflac are with you. We are working with government agencies that represent all declared disaster areas to ensure we do everything possible to help you. Based on that guidance, we have extended the due dates for policy premiums by 60 days for those living in places that have been declared disaster areas. If you have a question about your policy or need help, contact us at 800-992-3522. To help with the recovery, Aflac made a $500,000 donation to the American Red Cross, and our employees are making their own private contributions. Please be safe, as the care of you and your families is paramount.
The 21st Century Cures Act was signed into law on Dec. 13, 2016. The law includes the Small Business Healthcare Relief Act, which helps small businesses with fewer than 50 full-time equivalent employees to make pretax contributions for major medical insurance coverage for their employees through a health reimbursement arrangement (HRA) without being penalized. However, employee salary reduction contributions are still not permitted. Here are important details about how these new plans may help your clients, as well as important restrictions to consider before putting one in place.
The law allows small employers to provide employees with cost savings on a pretax basis: Employer funds contributed to a qualified small-employer health reimbursement arrangement are excluded from the employee’s taxable income and can then be used to pay or reimburse employees for premiums for individual health insurance coverage, Medicare supplemental insurance for employers exempt from the Medicare secondary requirements or other medical expenses on a pretax basis.
It protects employers from hefty IRS penalties: Previously, the fine was $100 per day, per employee, if employers tried to make health insurance ore affordable by directly paying or reimbursing their employees for individual market health insurance premiums for major medical insurance or medical expenses.
Employers should know there are several restrictions. To qualify, the arrangement plans:
This material is intended to provide general information about an evolving topic and does not constitute legal, tax or accounting advice regarding any specific situation. Aflac cannot anticipate all the facts that a particular employer or individual will have to consider in their benefits decision-making process. We strongly encourage readers to discuss their situations with their advisors.