Health Reimbursement Arrangements (HRAs) are account based plans that many small businesses use to help their workers pay premiums or fill in cost sharing obligations. In 2014, the IRS defined HRAs as group health plans, meaning these accounts have to meet insurance rules. Because HRAs are not insurance products, employers offering them are in violation of the ACA’s market rules, and can be fined $100 per day per employee. This fine – up to $500,000 per employer – is 18 times more than the fine for large employers who drop coverage.
Small businesses offering HRAs are trying to help their workers, but the IRS says their effort violates ACA requirements.
CAHC helped develop the Small Business Healthcare Relief Act (H.R. 5447/S. 3060). This critical legislation will allow small businesses with less than 50 employees to provide HRAs to help their workers and their families pay for health insurance premiums and other medical expenses without facing outrageous fines.
The bill text was incorporated into the 21st Century Cures Act (P.L. 114-255), which President Obama signed into law at the end of 2016.
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Law
Resources
- P.L. 114-255: 21st Century Cures Act; HRA provision- SEC. 18001
- Issue Brief: Health Reimbursement Arrangements
- Endorsements: Widespread Support for HRA’s
- HRA Bill – House Version: Small Business Health Care Relief Act of 2016
- HRA Bill – Senate Version: Small Business Health Care Relief Act of 2016
- Sign on Letter: Small Business Health Care Relief Act of 2016
Letters
- HRA Coalition Letter: June 15, 2016
- HRA Coalition Letter: March 2, 2016
- HRA Leadership Letter: December 4, 2015
- Letter to Senators Grassley and Heitkamp: August 19, 2015
- Letter to Representatives Boustany and Thompson: August 17, 2015
- Letter to House & Senate: July 13, 2015