The U.S. Congress passed legislation allowing small employers with 50 or fewer employees to provide Health Reimbursement Arrangements (HRAs) to their employees as an alternative to providing health insurance, according to a report from the Specialty Equipment Market Association.
The legislation was included in a larger medical research bill, the 21st Century Cures Act, which attracted more lobbyist activity than all but three of this year’s 11,000 congressional measures, according to NPR. The President is expected to sign it into law, the report from SEMA stated.
The Employers Council on Flexible Compensation (ECFC) said the provision “would establish new small employer health reimbursement arrangements so that eligible small employers can offer a health reimbursement arrangement funded solely by the employer that would reimburse employees for qualified medical expenses including health insurance premiums. The maximum reimbursement that can be provided under the plan is $4,950 or $10,000 if the plan provided for family members of the employee.
“For eligible small employers, this bill would overturn guidance issued by the Internal Revenue Service and the Department of Labor that stated that these arrangements violated the Affordable Care Act insurance market reforms and were subject to a penalty for providing such arrangements. The agency guidance would still prohibit these arrangements for larger employers. The provision is effective for plan years beginning after Dec. 31. (There was transition relief for plans offering these benefits that ends Dec. 31.)”