Small Groups 20 or Less

Can an employer pay for employee's Medicare premiums?

  • Employers can't pay employees' Medicare premiums directly. However, if the group size is 20 or less, they can designate funds for workers to apply for health insurance coverage and premium payments with a Section 105 plan. ... Employers can reimburse any Part B and Part D premiums for employees who are actively working. For groups larger than 20? 

  • June 14, 2019 - The Trump Administration issued an executive order that will allow employers to help employees pay for health insurance via health reimbursement arrangements.

  • As part of individual coverage health reimbursement arrangements (HRAs), employers can provide funding to their workforce for premiums and other medical care expenses beginning in 2020.

  • Health reimbursement arrangements (HRAs) are a type of account-based health plan that employers can use to reimburse employees for their medical care expenses. 

  • New rules released by the Departments of Labor, Health and Human Services, and the Treasury permit employers to offer a new “individual coverage HRA” as an alternative to traditional group health plan coverage, subject to certain conditions.  Among other medical care expenses, individual coverage HRAs can be used to reimburse premiums for individual health insurance chosen by the employee, promoting employee and employer flexibility, while also maintaining the same tax-favored status for employer contributions towards a traditional group health plans.

  • If you have Medicare eligible employees, schedule an appointment!

*Resources referenced are from cms.gov. We are not affiliated with any government agency. Last accessed Feb 2022