Legislation Would Allow Employers to Use Health Reimbursement Arrangements

Filed in Capitol Hill, Labor, Safety and Health by on June 25, 2015 0 Comments

HealthInsuranceNAHB achieved an important legislative victory today in its quest to address an unintended consequence in the Affordable Care Act that prevents small businesses from helping to provide health care for their employees.

NAHB has worked diligently with House and Senate lawmakers so that more employers can help their workers defray the high cost of medical premiums or out-of-pocket expenses.

At NAHB’s urging, the Small Business Healthcare Relief Act was introduced today in the House (H.R. 2911) by Reps. Charles Boustany (R-La.) and Mike Thompson (D-Calif.), and in the Senate (S. 1697) by Sens. Charles Grassley (R-Iowa) and Heidi Heitkamp (D-N.D.)

The legislation would enable small businesses to continue to use Health Reimbursement Arrangements (HRAs), which allow employers to provide pre-tax dollars to employees to pay for medical care and services.

Under the Affordable Care Act, stand-alone HRAs are no longer allowed. Starting on July 1, all employers – regardless of size – could face fines of $100 per day per employee if they offer HRAs to their employees. The $100 penalty will go into effect for businesses that provide reimbursement for more than one employee.

The legislation would restore the use of HRAs and rescind any penalties associated with them.

In an official statement commenting on the legislation, NAHB Chairman Tom Woods said:

“This is particularly important for small businesses with less than 50 employees. These employers, who are unable to administer or offer a health plan due to prohibitive costs, would still be able to make health insurance more affordable for their workers by reimbursing them for some or all of their medical expenses for an individual market health insurance policy.

“We urge Congress to move swiftly to pass this vital legislation so that more employers can help their workers defray the high cost of medical premiums or out-of-pocket expenses. We also urge the government not to penalize employers who offer HRAs while these bills move through the legislative process.”

For more information, contact Suzanne Beall at 800-368-5242 x8407.

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