Health Reimbursement Arrangement autonomous (HRA) is dead for most employers. Where is it?
there Two weeks, a group of lawmakers reintroduced the Small Business Act Relief Healthcare (S. 1697 and H. R. 2911). The legislation would allow small employers to use again an HRA to reimburse employees for health insurance premiums and out-of-pocket medical expenses.
What is the state of the HRA legislation? This article provides a quick guide on the who, what, where, when, and why.
Who is behind the bill?
Four lawmakers inserted language companion in the Senate and House of Representatives.
The legislation received bipartisan support and is co-sponsored by Sen. Chuck Grassley (R-Iowa), Senator Heidi Heitkamp (D North Dakota), Member of Congress Charles W. Boustany, Jr., MD (R-Louisiana)., and MP Mike Thompson, D-California.
Boustany and Thompson initially introduced legislation HRA in the last session of Congress.
What is proposed?
According to legislative documents, the S business center Relief Act Healthcare would provide an exemption from certain requirements group health plan to allow small businesses to use pretax dollars to help employees purchase policies in the individual market health insurance and other medical expenses out of pocket.
in other words, the legislation could boost the use of self to CRH for small employers.
where does the HRA legislation currently stand?
June 22, 2015, the bills were presented to Senate and House . The Senate bill was referred to the Finance Committee. The House bill has been referred to the Committee on Education and House labor.
When will we know the result?
At the time of writing, the exact chronology is known. If the bills pass their respective committees, they would then be considered by the Senate or the House. If nothing is done, or if the bill does not pass the committee, the bills were going to die at the end of the congressional session.
Why HRA legislation was introduced?
On September 13, 2013, Treasury issued guidelines disavowing employers to use HRAs autonomous to reimburse employees for expenses related health, stating these arrangements did not meet the requirements for benefits and annual minimum dollar capitalization of the affordable care Act for health insurance plans offered by employers.
accordingly, most employers who continue to offer HRAs autonomous and employer payment plans are subject to a $ 100 per day penalty per employee, totaling up to $ 36,500 during the year.
A recent press release issued by Boustany, the HRA legislation aims to restore flexibility and choice in the market by
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Making small businesses and local municipalities with fewer than 50 employees are allowed to continue to use pre-tax dollars to give employees a defined contribution for health spending.
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Allowing employees to use the HRA funds to purchase health coverage on the individual market and for eligible expenses out of pocket medical if the employee is qualified health coverage.
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protect employers from being penalized financially to provide this cost-sharing option for employees.
Conclusion
Small employers with fewer than 50 employees FTE are not mandate to provide health insurance coverage for employees, and most small employers choose not to offer traditional coverage because of high costs or restrictive terms of participation. But that does not tell the whole story. Most small employers would like to contribute to employee health costs, but they need more affordable ways to go about this.
Currently, small employers may use Article 105 reimbursement system for health care to pay the health insurance premiums tax-free employees, but plans are limited in nature to comply with the reforms.
If adopted, the law HRA overturn current restrictions on CRH and give companies and their employees more affordable and flexible health care solutions.
This law is vital to the small business community! Visit our legislative resource page for detailed information, including how you can help this bill becomes law.
What questions do you have about the legislation HRA? Leave a comment below. We will help you to answer.
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