List Bill Under a Section 125

[ABC]

How many producers are setting up list bills under a section 125 plan?

 

[Ann H]

Not me. I've seen some info about it from Golden Rule, and a couple of marketing pieces from agencies that have a questionable history about the things they sell. Until I hear from a reputable source or two that it's a sound way to go, I have no intention of even researching it much less implementing it. Besides, the first employee to be declined is usually the middle-aged business owner (or his wife)!

 

[AndreaSti]

Haven't done it here either. Does this have the potential to be a lot of work for little pay, then the next potential to fall like a house of cards with one decline (as in Ann's example)? Also, is it expensive for the biz owner to maintain if set up? Seems like anytime tax-savings are involved, it comes with tons of compliance, paperwork, and headaches for the business owner. Plus fees. Not saying this does because I don't know, but I just bet that is what happens. Gotta love the IRS.

 

[somarco]

List bill for major med or supplemental coverage?

 

[bukev1]

i have an employer that i was fixing to present this concept to. I called into uhc to get some data for the group. no one at the carrier had any knowledge of this program. It does look like an administrative burden and not sure if the tax savings are even worth it.

 

[LGilmore]

Why don't you go to the Irs website and look up the rules for a 125?

Something doesn't sound right in what you mention, a list bill to me, implies several individual plans not a single group plan. So... I don't think so. But again, the irs website will tell you who and what products work.

 

[Crabcake Johnny]

List bill is indeed for individual, not group plans and each state has its own rules. In MD, for example, it's not permitted for groups less than 50 employees.

 

[ABC]

First, I don't think it's legal to set up a list bill under a section 125 shell.

UHC/GR keeps talking about this new list bill they are developing. My question to them is can you put it under a 125. Why would an employer deal with a list bill if there is no tax advantage for the employee?

Under the new health care reform if this issue was addressed.

The list bill does not make sense to me unless the employer is actually paying the premium or they can run it under a section 125.

 

[Crabcake Johnny]

IMHO, it was a legal marketing ploy to sell more indie health. The theory is small employers that don't offer a group plan could offer common billing for individual plans to their employees.

The employees pay for it - comes out of their check but the employer pays the bill. This allows the employees to chose their own plan from the carrier's line up.

In theory, it doesn't break any state regulation since the employer is not pay the premium. But you are correct that since the employer isn't paying there are zero tax advantages.

 

[somarco]

List bill is common for supplemental plans such as AFLAC. It is also useful when the employer wants to make insurance available but not pay for it.

If the employer wants to contribute, consider an HRA and list bill.