Last year, Zane Benefits introduced a pilot program utilizing the pre-tax health insurance concept (originally referred to as the “Pre-tax Premium Payment (PPP)” program). The PPP program provided the opportunity for employers to set up a Section 125 cafeteria plan that allowed employees to set aside a portion of their paycheck voluntarily. The money set aside would be used to pay for individual health insurance premiums using pre-tax dollars.
Recently, the Department of Labor issued guidance on the Affordable Care Act. The release included a discussion of Section 125 cafeteria plans and individual health insurance. As a result of this new federal guidance, Zane Benefits will no longer be promoting the pre-tax health insurance program.
Any DeWitt Risk Management groups who wish to continue to allow employees to take advantage of the section 125 cafeteria plan for individual health insurance premium, are encouraged to consult with their legal counsel.
We will continue to work with providers intent on exploring other affordable insurance options for employees of small employers that do not provide group health insurance. Please get in touch with your group benefits specialist at DeWitt Risk Management with any questions or to discuss alternate options for your group or company.