A provision of the Health Care reform took place on September 23, 2010 that has many employers confused and frustrated. In the past companies could discriminate with their health care plan and provide benefits to executives or highly compensated employees that were not available to all employees.
Here are some important things to know about this provision:
Who is considered a “Highly Compensated individual”?
- Unfortunately the Health Care Reform Law does not specifically define it. However in the past for Self Insured Plans the IRS has determined that the follwing are considered Highly Compensated. (1) Top 5 highest paid officers of the company, (2) Shareholder of the company that owns more than 10% of the stock in the company, (3) Among the highest paid of the top 25% of the company.
Do I have to comply? Can’t I keep my current plan?
- If you qualify for a “grandfathered plan” you can continue to discriminate in favor of highly compensated employees.
For more information on how to navigate these new Health Care reform provisions contact us for a free consultation.