Insurance stipends or reimbursements to employees for their own health insurance premiums have been a fairly common practice among small employers for years. It was a great way to offer flexible pre-tax benefits without needing a group health plan. But the ACA ended that benefit, making stipends/reimbursements taxable wages to employees. Essentially, these payments constitute group health plans that violate the prohibition on capping maximum benefits. However, new IRS guidance was just released that provides some relief for employers with fewer than 100 employees in 2014 – reimbursements to employees that were conditioned on the purchase of health insurance by the employee are not taxable for 2014; employers with fewer than 50 employees in 2015 can offer pre-tax stipends/reimbursements through June 30, 2015. This means a lot of amended payroll returns and W2s, but it could be a huge tax savings for employers and employees. IRS Notice 2015-17 provides more detail about the transition relief.