A new Internal Revenue Service final rule will be a big help to employers that want to let employees use cafeteria plans to buy individual health insurance.
Benefits experts at the Council for Affordable Health Insurance, Alexandria, Va., come to that conclusion in an analysis of the new IRS and U.S. Treasury Department regulations concerning cafeteria plans.
One section of the final rule makes it clear that insurers and employers can use cafeteria plans to administer “list billing” arrangements, or arrangements to let employees pay for their own individual health coverage through the employer’s payroll deduction system, CAHI says.
Some had questioned whether federal tax regulations really permitted employers to put list billing arrangements in cafeteria plans, CAHI says.
In addition to putting list billing arrangements inside cafeteria plans, cafeteria plans also can reimburse employees for health insurance premiums directly, CAHI says.