Health and welfare benefits are benefits that are not retirement plans designed to provide income after a worker retires. These include benefits for the overall welfare of the employee such as health insurance, self-insured health coverage and related plans such as cafeteria plans, health reimbursement arrangements (HRAs), Medical Expense Reimbursement Plans (MERPs), Flexible Spending Accounts (FSAs), Health Savings Accounts (HSAs), and retiree health benefits. Welfare plans can also include vacation and leave plans, paid time off (PTO), as well as severance plans.
All of these plans have rules that must be followed to ensure that the benefits provided are done so with the intended tax or other advantages as well as to avoid adverse consequences. Our attorneys can help clients use these various plans to help employers provide sustainable benefits.
Of course, the biggest, most pressing issue in health and welfare plans is health care reform under the legislation commonly known as the Affordable Care Act or "Obamacare" which imposes additional taxes on certain employers, if their health insurance does not provide certain essential benefits or minimum value at an affordable price to employees or if the coverage provided is too good-a "Cadillac" plan. Our attorneys can help employers navigate the rules required to ensure compliance to retain tax advantages without having to pay penalty taxes.