Villela & Shilts CPA Insight Issue 2

1. Issue 2, Aug. 2015
Health Reimbursement Accounts in 2015
Small business owners face a challenge on finding
the attractive health benefits for recruiting and
retaining employees. Over the past year this
challenge has increased due to the Affordable Care
Act (ACA), which created new regulations and new
challenges for small business owners.
Many small businesses have turned to Health
Reimbursement Accounts (HRA) to control
healthcare
costs.
For a long
time HRA
accounts
have been an
attractive
vehicle for
small
business
owners with
flexible
regulations. However, the recent health care reform
has left small business owners wondering if their
health benefits are still compliant.
In 2013, the Department of Labor announced that
stand-alone HRAs with more than 2 participants
would need to comply with annual limit regulations.
Therefore, the availability of stand-alone HRAs has
been limited for most companies after 2014.
Employers with non-compliant HRAs now face
hefty fees.
What is an HRA?
An HRA is an employer funded, tax-advantage
health benefit. It is not considered health insurance.
It is a way to provide allowances for individual
health insurance reimbursements. These plans offer
small businesses a solution by:
• Offering employees a way to reimburse
individual health insurance premiums tax-
free
• Allow the employer to control the cost of
health benefit 100%
• Give employees a choice over their health
care
The Insight
Issue 2, August 2015Villela & Shilts, LLC
www.villelashilts.com
“Recent health care
reform has left small
business owners
wondering if their
health benefits are still
compliant”

2. Issue 2, Aug. 2015
Which HRA is compliant?
The following are three types of compliant HRAs:
1. Integrated HRAs - An HRA linked with a
high deductible group health insurance plan.
This is used as a supplement to assist with
deductible costs and is only offered to those
employees at the company enrolled in the
group health insurance plan. The HRA is
100% employer-funded. It’s important to
work with your broker to ensure the group
health insurance plan, combined with the
Integrated HRA meets all the health reform
requirements.
2. Retiree HRAs - Designed to reimburse
employees only after retirement. Under the
current regulations, this type of HRA is
generally not subject to the “annual limit”
requirements. Make sure to discuss plan
requirements with your HRA administrator
to ensure compliance.
3. One-Person Stand-Alone HRAs - Is not
paired with a group health insurance plan
and is for companies with fewer than 2
employees. It is offered as the sole health
benefit and is generally used to reimburse
employees for individual health insurance
premiums and out-of-pocket medical
expenses. These HRAs are popular with C-
Corp owners, one-person non-profits, and
entrepreneurs. These plans are 100% funded
by the employer and therefore offer a good
opportunity for an increased business
deduction.
With recent changes to healthcare regulations, many
small business owners have been left confused and
wondering if their current plans are still compliant.
It’s important to evaluate your current plans and to
discuss with your advisors not only compliance but
potential tax saving opportunities if no plans are
currently in place.
Important Dates
Sept. 15, 2015
• Final deadline to file your 2014 corporation, S-
corporation, partnership, or estates/trusts tax
return if you filed an extension.
• Due date for third installment of 2015
estimated tax payments.
Oct. 15, 2015
• Final deadline to file your 2014 personal tax
return if you filed an extension on or before
April 15.
Oct. 20, 2015
• Final deadline to resubmit a rejected 2014
return that was originally e-filed on or before
Oct. 15.
• If you’re expecting a refund and miss the Oct.
20 e-file cutoff date, you have until April 16,
2018 (Oct. 15, 2018, if you filed an extension)
to file a paper return and claim your 2014
refund.