Small Business Health Plan Compliance Toolkit

A simple packaged solution to help small business owners and advisers comply with 2015 tax law changes for employer-provided health plans and mitigate potentially severe tax penalties.
Purpose of Toolkit

Toolkit Contents

Pricing and Adviser Support



This toolkit is designed to help small businesses avoid or minimize the tax penalties included in the 2015 market reform requirements of the Affordable Care Act. Specifically, the kit helps firms end non-compliant practices and convert their offending health plan arrangements to a permitted format when employers have paid or reimbursed the cost of:

  • Individual health insurance (a Section 105 plan)

  • Uninsured expenses outside of an integrated group health insurance (a Medical Expense Reimbursement Plan (MERP) or Health Reimbursement Arrangement (HRA)

  • Health Savings Account (HSA) in addition to a Flexible Spending Account (FSA) with carry-over benefits from the prior year.

The kit helps employers minimize the tax and legal risks of using the strategies outlined in IRS notices 2013-54 and 2015-17. NOTE THAT NO ASURANCE IS OFFERED THAT SMALL BUSINSSES WILL AVOID ANY TAX PENALTY. The approach incorporated by the Toolkit materials is suggested as a good faith compliance measure.

Without corrective action, small businesses run the risk of penalties for improper wage tax informational filings as well as the severe $100 per employee per day penalty under IRC 4980D.

The compliance and tax mitigation strategy is to address the offending health plan as soon as possible by amending or terminating the plan (or converting it from an employee benefit plan to a payroll system accommodation and then addressing penalty relief provisions built into IRC 4980D.


The toolkit contains:

  1. Sample document explaining termination of prior health plan and new option available
  2. Sample email cover note communication to employees
  3. Sample employee election form
  4. Sample corporate resolution
  5. Sample ACA notice of Health Insurance Marketplace eligibility
  6. Order form for customizing the tools
  7. Copy of engagement agreement and fair use agreement.

The tools are drafted in the Office 2016 (Office 365) version of Microsoft Word.


The toolkit is available to directly to small businesses without charge. The kit is not available to accountants>

, advisers or agents at this time but is expected to be available to all soon.



For background information see “Novak’s 2015 small business health plan tax article bibliography”. The bibliography is meant as a free public resource and the toolkit is meant as a solicitation of commercial service.

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