The following question came to us recently from a small group client. Send us your question and we may use yours in the future!
Are we able to give a signing up bonus to encourage employees to sign up for health insurance or will that be an issue with health care reform?
An employer may provide bonuses at its discretion as long as the amount is reported as taxable compensation. Federal law prohibits employers from providing incentives to certain employees (such as Medicare-eligible persons) to discourage them from enrolling for group health coverage, but there is no prohibition against incentives to encourage enrollment. The bonus would be taxable compensation and is outside the group health plan. As such, it will not be impacted by the Affordable Care Act (health care reform).