Belgarath Posted November 17, 2014 Share Posted November 17, 2014 Is it ok for participants to take a cash option from a Cafeteria Plan that is taxed as regular income, and use that money to go to the Exchange and purchase health insurance on their own? I'm thinking it is ok, but I'm having a hard time "proving" it to myself. All the FAQ's/guidance is rather confusing. It seems to me that an insurance purchased on the Exchange isn't an "individual health insurance policy" for purposes of the guidance? Link to comment Share on other sites More sharing options...
jsb Posted November 20, 2014 Share Posted November 20, 2014 Sure, why not? Once the money is paid to the employee as taxable income it's just income; the employee is free to do whatever they choose with it including purchasing hockey tickets ... or a sofa ... or exchange coverage ... Link to comment Share on other sites More sharing options...
GBurns Posted November 21, 2014 Share Posted November 21, 2014 It might depend on the size of the employer and the wording of the cash option. State small group/employer health insurance law might prohibit reimbursement directly or indirectly, in any form, which means that there must be no wording that connects the cash out to the purchase. The same applies under ACA. George D. Burns Cost Reduction Strategies Burns and Associates, Inc www.costreductionstrategies.com(under construction) www.employeebenefitsstrategies.com(under construction) Link to comment Share on other sites More sharing options...
Belgarath Posted November 21, 2014 Author Share Posted November 21, 2014 Thanks. Link to comment Share on other sites More sharing options...
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