Employer reimbursing for Out of Pocket expense

[steve-o]

Forgive my ignorance here, as I don't deal with these issues often.

Can a small employer (fewer than 50 employees) reimburse a portion of an employee's out of pocket expense without running afoul of ACA and/or tax law?

Employer currently pays 80% of medical insurance premiums.  Employee has $1,500 deductible with $3,500 out of pocket max.  Employer has been covering the second half of that out of pocket max (dollars 1,751 through 3,500) in the form of a check to the employee. 

Any guidance is appreciated.

[Chaz]

An employer (large or small) who offers its employees minimum essential coverage under a group health plan can provide tax-free reimbursement of OOP expenses through the use of a health reimbursement arrangement.  It needs to be done pursuant a written plan document and is subject to the requirements of ERISA.  These arrangements are very common.  You should speak with benefits counsel about setting one up.

[steve-o]

Thank you, Chaz!