While this was more of a hot topic when the full monty of healthcare reform was implemented back in 2014, some employers perhaps unaware of the turmoil in the individual marketplace still ask about reimbursing employees for individual health insurance policies.
The IRS, the Department of Labor and Health and Human Services have all released several directives and guidelines that pretty clearly prohibit the practice. The most recent was issued in December 2015 (n-15-17).
According to the IRS, the DOL, and HHS:
“… any employer arrangements that reimburse employees (or pay directly) for individual premiums are prohibited under the Affordable Care Act (ACA), whether employers treat the money as pre-tax or post-tax for employees.”
The net of all the regs, guidelines, and directives seems to come down to this: Employers that reimburse employees for individual health policies are violating ACA regulations and may be subject to some significant IRS imposed penalties.
Here’s a link to more detailed info and explanations: