I have a small employer - only one employee. Obviously, the employer is not required to provide health insurance under ACA. Is this employer allowed to provide ONLY an HRA to the employee, as a tax free fringe, and let the employee get his own insurance? The employee is responsible for himself to be sure he has minimum coverage, correct? If the employee gets coverage that qualifies for an HSA, can he also fund that on his own? I would appreciate insights!
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Your post didn't say if the "employer" was a corporation or a self-employed individual. A corporate employer can set up an HRA even if there is just one employee. A sole proprietor, however, can not have an HRA.
If your client is a corp and wants to proceed with an HRA, I strongly suggest that you and/or your client read about them in order that their requirements, advantages, disadvantages, and limitations are well understood.Roland Slugg
"I do what I can." -
WARNING ... DANGER!!!
A 'stand-alone' HRA is ONLY allowed if there is ONE employee (actually, it think it's "participant"). If there are more participants, the employer is subject to GIGANTIC fines of $100 per day per participant.
As Roland pointed out a Sole Proprietor can not have an HRA for himself, BUT can have an HRA for an employee of the business.
If it's a corporation, is there one employee BESIDES the owner/shareholder(s)? Again, more than one employee can be major problems.
Yes, an employee is responsible for himself for getting insurance.
Yes, a person with a High Deductible Health Plan (HDHP) can fund his Health Savings Account (HSA) himself (although a HDHP and HSA through the employer can also reduce Social Security and Medicare taxes).Comment
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