ALERT
“July 1 is the deadline for compliance for small employers regarding individual health insurance.
You possibly have seen information of changes that have been imposed on the long-standing practice of small employers in which they have reimbursed premiums for individual health insurance policies (termed “Employer Payment Plans” or EPPS by the IRS). Many churches follow this practice as they were unable to obtain or provide group health insurance for their pastor(s) or other staff.
Through a progression of Notices, the IRS informed employers that EPPs cannot be compliant with the Affordable Care Act requirements and therefore cannot be paid as nontaxable benefits. Furthermore, if an amount is added to salaries so that employees can buy health insurance, the employer cannot require those employees to use the increase for health care. Any violation of these guidelines is subject to stiff penalties up to $100 per affected employee per day.
In February, the IRS announce “relief” from the penalties until July 1, 2015. Employers not complying by that date will be subject to the penalty and to self-reporting their violation.”