New Health Reimbursement Arrangements Provide Relief to Employers
Monday, November 05, 2018
A new regulation jointly published on Oct. 29, by Health and Human Services, Labor, and IRS, related to Health Reimbursement Arrangements (HRAs), is designed provide some relief to small businesses by allowing small employers to give their employees funds to pay for health care coverage selected by the employees.
During recent Small Business Administration (SBA) Regional Regulatory Reform Roundtables, many small entities expressed complaints about their inability to obtain reasonably priced health insurance for their employees. The new HRAs are an effort to provide relief to those business owners and their employees. HRAs were originally penalized under the Patient Protection and Affordable Care Act (PPACA), P.L. 111-148, but were later restored by the 21st Century Cures Act, P.L. 114-255. HRAs are generally account-based group health plans funded solely by employer contributions that reimburse employees for health care costs.
The departments noted that the regulations were being issued to increase the usability of HRAs, to expand employers’ ability to offer HRAs to their employees, and to allow HRAs to be used in conjunction with non-group health insurance coverage (generally coverage on the individual market).
Accordingly, the proposed regulations would relax the rules that allow HRAs to be integrated with group health plans but not with individual health insurance coverage. The proposed regulations would also allow the Sec. 36B premium tax credit rules to be disregarded to permit employees whose employers maintain HRAs to be eligible for the credit.
See the official Health Reimbursement Arrangements and Other Account-Based Group Health Plans document. Comments are due on or before December 29, 2018.
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