{"id":5723,"date":"2015-01-27T01:50:23","date_gmt":"2015-01-27T07:50:23","guid":{"rendered":"https:\/\/www.cainwatters.com\/?post_type=digitalblogs&p=5522"},"modified":"2019-09-30T18:53:47","modified_gmt":"2019-09-30T23:53:47","slug":"save-the-penalties-for-super-bowl-sunday","status":"publish","type":"post","link":"https:\/\/www.cainwatters.com\/digitalblogs\/save-the-penalties-for-super-bowl-sunday\/","title":{"rendered":"Save the Penalties for Super Bowl Sunday"},"content":{"rendered":"

January 2015<\/span><\/p>\n

Like many small employers, you may be reimbursing your employees to support the cost of their health insurance premiums. Often referred to as an Employee Payment Plan, or EPP, these payment arrangements are popular among small employers because they help mitigate some of the costs and plan administration burdens associated with offering employees group health benefits.<\/span><\/p>\n

Typically, in an EPP, the employer will encourage or require participating employees to submit the amount paid for their insurance premium to the employer for reimbursement. In some cases, the employer will pay the premium directly. Either way, the reimbursements have been tax-free income to the employee as long as the employer made the reimbursement under a Code Section 105 medical reimbursement plan, and it could be \u00a0substantiated that the employer covered premium costs. Moreover, for many small employers, it was widely understood that reimbursing employee premiums after-tax wouldn\u2019t necessitate a Section 105 medical reimbursement plan in the first place.<\/span><\/p>\n

This is where things get interesting. <\/span><\/p>\n

This past November, the Department of Labor (DOL), posted a FAQ clarifying the ACA\u2019s market reform provisions<\/span><\/a> impacting EPPs. Here\u2019s the net of it: \u00a0EPPs are considered group health plans<\/strong>,<\/span> however, market reform establishes that \u201cplans\u201d can\u2019t limit any individual\u2019s annual benefits, and plans must also provide certain preventative services without cost-sharing requirements. And since EPPs can\u2019t be integrated with individual market policies to meet these market reform requirements they are in violation and subject to penalties. <\/span><\/span><\/p>\n

Consider sitting down at this point. <\/span><\/p>\n

As of January 1, 2014, if you\u2019re an employer offering an EPP, under IRC Section 4980D, you can be hit with penalties to the tune of a $100 per day, per employee. If you\u2019re doing the math, let us help \u2013 that\u2019s $36,500 per employee. And yes, barring IRS leniency, it can be applied beginning January 1, 2014. <\/span><\/p>\n

The impact also extends to Partnerships and S Corporations\u2019 EPPs for shareholders, however, there are numerous considerations as it relates to these structures, so it\u2019s best to work closely with your planner to get a full understanding of what your options are, or risk being hit with that ugly $36,500 annual penalty as well.<\/span><\/p>\n

If you feel you may be at risk, consider these options:<\/span><\/p>\n

    \n
  1. Re-characterize any tax-free reimbursements.<\/b> If possible, you\u2019ll want to quickly readdress 2014 W-2 forms making reimbursements or payments of employee premiums taxable income.<\/li>\n
  2. Do away with any insurance reimbursement plans.<\/b> Although, still technically allowed, EPPs are no longer a tax-free option.<\/li>\n
  3. Increase employees\u2019 taxable wage<\/b>. Although you won\u2019t be able to require that the additional pay be used for an individual policy \u2013 it\u2019s the employee\u2019s choice on how to spend the money \u2013 you can claim a deduction for the wages paid. For the employee, the income is taxable, but the premiums can be claimed as an itemized deduction.<\/li>\n
  4. Offer a tax-free fringe benefit<\/b>. Albeit burdensome, by shopping the market for an affordable ACA-approved group health plan in which your employees can participate, you can avoid all penalties.<\/li>\n
  5. Pray for mercy.<\/b> After all, the DOL did not issue the clarification until November 2014. Your swift action to comply could be taken into consideration if ever addressed by the IRS. And, of course, consulting your financial or tax advisor before taking any action is always a good idea.<\/li>\n<\/ol>\n

     <\/p>\n","protected":false},"excerpt":{"rendered":"

    January 2015 Like many small employers, you may be reimbursing your employees to support the cost of their health insurance premiums. Often referred to as an Employee Payment Plan, or EPP, these payment arrangements are popular among small employers because they help mitigate some of the costs and plan administration burdens associated with offering employees […]<\/p>\n","protected":false},"author":7,"featured_media":6234,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":"","_ppma_block_editor_authors":""},"categories":[20,21],"tags":[],"ppma_author":[48],"class_list":["post-5723","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-practice-management","category-tax-news"],"acf":[],"yoast_head":"\nSave the Penalties for Super Bowl Sunday - Cain Watters Blog<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.cainwatters.com\/digitalblogs\/save-the-penalties-for-super-bowl-sunday\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Save the Penalties for Super Bowl Sunday - Cain Watters Blog\" \/>\n<meta property=\"og:description\" content=\"January 2015 Like many small employers, you may be reimbursing your employees to support the cost of their health insurance premiums. Often referred to as an Employee Payment Plan, or EPP, these payment arrangements are popular among small employers because they help mitigate some of the costs and plan administration burdens associated with offering employees […]\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.cainwatters.com\/digitalblogs\/save-the-penalties-for-super-bowl-sunday\/\" \/>\n<meta property=\"og:site_name\" content=\"Cain Watters Blog\" \/>\n<meta property=\"article:published_time\" content=\"2015-01-27T07:50:23+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2019-09-30T23:53:47+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.cainwatters.com\/digitalblogs\/wp-content\/uploads\/sites\/2\/2015\/01\/Obamacare-2cropped.162016.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"600\" \/>\n\t<meta property=\"og:image:height\" content=\"540\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"CWA\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"CWA\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/www.cainwatters.com\\\/digitalblogs\\\/save-the-penalties-for-super-bowl-sunday\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/www.cainwatters.com\\\/digitalblogs\\\/save-the-penalties-for-super-bowl-sunday\\\/\"},\"author\":{\"name\":\"CWA\",\"@id\":\"https:\\\/\\\/www.cainwatters.com\\\/digitalblogs\\\/#\\\/schema\\\/person\\\/5377defb92fcf06c1ff8504bf9880267\"},\"headline\":\"Save the Penalties for Super Bowl Sunday\",\"datePublished\":\"2015-01-27T07:50:23+00:00\",\"dateModified\":\"2019-09-30T23:53:47+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/www.cainwatters.com\\\/digitalblogs\\\/save-the-penalties-for-super-bowl-sunday\\\/\"},\"wordCount\":555,\"commentCount\":0,\"image\":{\"@id\":\"https:\\\/\\\/www.cainwatters.com\\\/digitalblogs\\\/save-the-penalties-for-super-bowl-sunday\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/www.cainwatters.com\\\/digitalblogs\\\/wp-content\\\/uploads\\\/sites\\\/2\\\/2015\\\/01\\\/Obamacare-2cropped.162016.jpg\",\"articleSection\":[\"Practice Management\",\"Tax News\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\\\/\\\/www.cainwatters.com\\\/digitalblogs\\\/save-the-penalties-for-super-bowl-sunday\\\/#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/www.cainwatters.com\\\/digitalblogs\\\/save-the-penalties-for-super-bowl-sunday\\\/\",\"url\":\"https:\\\/\\\/www.cainwatters.com\\\/digitalblogs\\\/save-the-penalties-for-super-bowl-sunday\\\/\",\"name\":\"Save the Penalties for Super Bowl Sunday - Cain Watters Blog\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/www.cainwatters.com\\\/digitalblogs\\\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\\\/\\\/www.cainwatters.com\\\/digitalblogs\\\/save-the-penalties-for-super-bowl-sunday\\\/#primaryimage\"},\"image\":{\"@id\":\"https:\\\/\\\/www.cainwatters.com\\\/digitalblogs\\\/save-the-penalties-for-super-bowl-sunday\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/www.cainwatters.com\\\/digitalblogs\\\/wp-content\\\/uploads\\\/sites\\\/2\\\/2015\\\/01\\\/Obamacare-2cropped.162016.jpg\",\"datePublished\":\"2015-01-27T07:50:23+00:00\",\"dateModified\":\"2019-09-30T23:53:47+00:00\",\"author\":{\"@id\":\"https:\\\/\\\/www.cainwatters.com\\\/digitalblogs\\\/#\\\/schema\\\/person\\\/5377defb92fcf06c1ff8504bf9880267\"},\"breadcrumb\":{\"@id\":\"https:\\\/\\\/www.cainwatters.com\\\/digitalblogs\\\/save-the-penalties-for-super-bowl-sunday\\\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\\\/\\\/www.cainwatters.com\\\/digitalblogs\\\/save-the-penalties-for-super-bowl-sunday\\\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\\\/\\\/www.cainwatters.com\\\/digitalblogs\\\/save-the-penalties-for-super-bowl-sunday\\\/#primaryimage\",\"url\":\"https:\\\/\\\/www.cainwatters.com\\\/digitalblogs\\\/wp-content\\\/uploads\\\/sites\\\/2\\\/2015\\\/01\\\/Obamacare-2cropped.162016.jpg\",\"contentUrl\":\"https:\\\/\\\/www.cainwatters.com\\\/digitalblogs\\\/wp-content\\\/uploads\\\/sites\\\/2\\\/2015\\\/01\\\/Obamacare-2cropped.162016.jpg\",\"width\":600,\"height\":540,\"caption\":\"Referee Legs and Flag\"},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\\\/\\\/www.cainwatters.com\\\/digitalblogs\\\/save-the-penalties-for-super-bowl-sunday\\\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\\\/\\\/www.cainwatters.com\\\/digitalblogs\\\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Save the Penalties for Super Bowl Sunday\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\\\/\\\/www.cainwatters.com\\\/digitalblogs\\\/#website\",\"url\":\"https:\\\/\\\/www.cainwatters.com\\\/digitalblogs\\\/\",\"name\":\"Cain Watters Blog\",\"description\":\"Long Term Solutions for Financial Independence\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\\\/\\\/www.cainwatters.com\\\/digitalblogs\\\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"},{\"@type\":\"Person\",\"@id\":\"https:\\\/\\\/www.cainwatters.com\\\/digitalblogs\\\/#\\\/schema\\\/person\\\/5377defb92fcf06c1ff8504bf9880267\",\"name\":\"CWA\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\\\/\\\/secure.gravatar.com\\\/avatar\\\/7cd3f0890490030e268fd26d8201e65299246a9877bf0580593351d6e7b2d23b?s=96&d=mm&r=g6624cf3b6f65cf286af28a8c7bd86693\",\"url\":\"https:\\\/\\\/secure.gravatar.com\\\/avatar\\\/7cd3f0890490030e268fd26d8201e65299246a9877bf0580593351d6e7b2d23b?s=96&d=mm&r=g\",\"contentUrl\":\"https:\\\/\\\/secure.gravatar.com\\\/avatar\\\/7cd3f0890490030e268fd26d8201e65299246a9877bf0580593351d6e7b2d23b?s=96&d=mm&r=g\",\"caption\":\"CWA\"},\"url\":\"https:\\\/\\\/www.cainwatters.com\\\/digitalblogs\\\/author\\\/paigeworley\\\/\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Save the Penalties for Super Bowl Sunday - Cain Watters Blog","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/www.cainwatters.com\/digitalblogs\/save-the-penalties-for-super-bowl-sunday\/","og_locale":"en_US","og_type":"article","og_title":"Save the Penalties for Super Bowl Sunday - Cain Watters Blog","og_description":"January 2015 Like many small employers, you may be reimbursing your employees to support the cost of their health insurance premiums. Often referred to as an Employee Payment Plan, or EPP, these payment arrangements are popular among small employers because they help mitigate some of the costs and plan administration burdens associated with offering employees […]","og_url":"https:\/\/www.cainwatters.com\/digitalblogs\/save-the-penalties-for-super-bowl-sunday\/","og_site_name":"Cain Watters Blog","article_published_time":"2015-01-27T07:50:23+00:00","article_modified_time":"2019-09-30T23:53:47+00:00","og_image":[{"width":600,"height":540,"url":"https:\/\/www.cainwatters.com\/digitalblogs\/wp-content\/uploads\/sites\/2\/2015\/01\/Obamacare-2cropped.162016.jpg","type":"image\/jpeg"}],"author":"CWA","twitter_card":"summary_large_image","twitter_misc":{"Written by":"CWA","Est. reading time":"3 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/www.cainwatters.com\/digitalblogs\/save-the-penalties-for-super-bowl-sunday\/#article","isPartOf":{"@id":"https:\/\/www.cainwatters.com\/digitalblogs\/save-the-penalties-for-super-bowl-sunday\/"},"author":{"name":"CWA","@id":"https:\/\/www.cainwatters.com\/digitalblogs\/#\/schema\/person\/5377defb92fcf06c1ff8504bf9880267"},"headline":"Save the Penalties for Super Bowl Sunday","datePublished":"2015-01-27T07:50:23+00:00","dateModified":"2019-09-30T23:53:47+00:00","mainEntityOfPage":{"@id":"https:\/\/www.cainwatters.com\/digitalblogs\/save-the-penalties-for-super-bowl-sunday\/"},"wordCount":555,"commentCount":0,"image":{"@id":"https:\/\/www.cainwatters.com\/digitalblogs\/save-the-penalties-for-super-bowl-sunday\/#primaryimage"},"thumbnailUrl":"https:\/\/www.cainwatters.com\/digitalblogs\/wp-content\/uploads\/sites\/2\/2015\/01\/Obamacare-2cropped.162016.jpg","articleSection":["Practice Management","Tax News"],"inLanguage":"en-US","potentialAction":[{"@type":"CommentAction","name":"Comment","target":["https:\/\/www.cainwatters.com\/digitalblogs\/save-the-penalties-for-super-bowl-sunday\/#respond"]}]},{"@type":"WebPage","@id":"https:\/\/www.cainwatters.com\/digitalblogs\/save-the-penalties-for-super-bowl-sunday\/","url":"https:\/\/www.cainwatters.com\/digitalblogs\/save-the-penalties-for-super-bowl-sunday\/","name":"Save the Penalties for Super Bowl Sunday - Cain Watters Blog","isPartOf":{"@id":"https:\/\/www.cainwatters.com\/digitalblogs\/#website"},"primaryImageOfPage":{"@id":"https:\/\/www.cainwatters.com\/digitalblogs\/save-the-penalties-for-super-bowl-sunday\/#primaryimage"},"image":{"@id":"https:\/\/www.cainwatters.com\/digitalblogs\/save-the-penalties-for-super-bowl-sunday\/#primaryimage"},"thumbnailUrl":"https:\/\/www.cainwatters.com\/digitalblogs\/wp-content\/uploads\/sites\/2\/2015\/01\/Obamacare-2cropped.162016.jpg","datePublished":"2015-01-27T07:50:23+00:00","dateModified":"2019-09-30T23:53:47+00:00","author":{"@id":"https:\/\/www.cainwatters.com\/digitalblogs\/#\/schema\/person\/5377defb92fcf06c1ff8504bf9880267"},"breadcrumb":{"@id":"https:\/\/www.cainwatters.com\/digitalblogs\/save-the-penalties-for-super-bowl-sunday\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/www.cainwatters.com\/digitalblogs\/save-the-penalties-for-super-bowl-sunday\/"]}]},{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.cainwatters.com\/digitalblogs\/save-the-penalties-for-super-bowl-sunday\/#primaryimage","url":"https:\/\/www.cainwatters.com\/digitalblogs\/wp-content\/uploads\/sites\/2\/2015\/01\/Obamacare-2cropped.162016.jpg","contentUrl":"https:\/\/www.cainwatters.com\/digitalblogs\/wp-content\/uploads\/sites\/2\/2015\/01\/Obamacare-2cropped.162016.jpg","width":600,"height":540,"caption":"Referee Legs and Flag"},{"@type":"BreadcrumbList","@id":"https:\/\/www.cainwatters.com\/digitalblogs\/save-the-penalties-for-super-bowl-sunday\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/www.cainwatters.com\/digitalblogs\/"},{"@type":"ListItem","position":2,"name":"Save the Penalties for Super Bowl Sunday"}]},{"@type":"WebSite","@id":"https:\/\/www.cainwatters.com\/digitalblogs\/#website","url":"https:\/\/www.cainwatters.com\/digitalblogs\/","name":"Cain Watters Blog","description":"Long Term Solutions for Financial Independence","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/www.cainwatters.com\/digitalblogs\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"},{"@type":"Person","@id":"https:\/\/www.cainwatters.com\/digitalblogs\/#\/schema\/person\/5377defb92fcf06c1ff8504bf9880267","name":"CWA","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/secure.gravatar.com\/avatar\/7cd3f0890490030e268fd26d8201e65299246a9877bf0580593351d6e7b2d23b?s=96&d=mm&r=g6624cf3b6f65cf286af28a8c7bd86693","url":"https:\/\/secure.gravatar.com\/avatar\/7cd3f0890490030e268fd26d8201e65299246a9877bf0580593351d6e7b2d23b?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/7cd3f0890490030e268fd26d8201e65299246a9877bf0580593351d6e7b2d23b?s=96&d=mm&r=g","caption":"CWA"},"url":"https:\/\/www.cainwatters.com\/digitalblogs\/author\/paigeworley\/"}]}},"authors":[{"term_id":48,"user_id":7,"is_guest":0,"slug":"paigeworley","display_name":"CWA","avatar_url":"https:\/\/secure.gravatar.com\/avatar\/7cd3f0890490030e268fd26d8201e65299246a9877bf0580593351d6e7b2d23b?s=96&d=mm&r=g","author_category":"","first_name":"Paige","last_name":"Worley","user_url":"","job_title":"","description":""}],"_links":{"self":[{"href":"https:\/\/www.cainwatters.com\/digitalblogs\/wp-json\/wp\/v2\/posts\/5723","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.cainwatters.com\/digitalblogs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.cainwatters.com\/digitalblogs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.cainwatters.com\/digitalblogs\/wp-json\/wp\/v2\/users\/7"}],"replies":[{"embeddable":true,"href":"https:\/\/www.cainwatters.com\/digitalblogs\/wp-json\/wp\/v2\/comments?post=5723"}],"version-history":[{"count":0,"href":"https:\/\/www.cainwatters.com\/digitalblogs\/wp-json\/wp\/v2\/posts\/5723\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.cainwatters.com\/digitalblogs\/wp-json\/wp\/v2\/media\/6234"}],"wp:attachment":[{"href":"https:\/\/www.cainwatters.com\/digitalblogs\/wp-json\/wp\/v2\/media?parent=5723"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.cainwatters.com\/digitalblogs\/wp-json\/wp\/v2\/categories?post=5723"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.cainwatters.com\/digitalblogs\/wp-json\/wp\/v2\/tags?post=5723"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/www.cainwatters.com\/digitalblogs\/wp-json\/wp\/v2\/ppma_author?post=5723"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}