The Small Business Healthcare Relief Act May Provide Additional Options
When IRS Notice 2013-54 was released at the end of 2013, it contained information that put an end to most stand-alone Health Reimbursement Arrangements (HRAs). Many employers used HRAs to provide additional benefits to their employees. Small employers used HRAs to provide funds for employees to cover out-of-pocket medical costs instead of offering a group health plan.
The Small Business Healthcare Relief Act has been introduced to Congress, and if passed, will allow small businesses to offer HRA plans without the requirement of also offering a group health plan. The act can be found under the following:
These HRAs will be able to be offered by employers who have less than 50 employees and are not considered Applicable Large Employers (ALEs). The HRA funds will be able to be used to reimburse eligible expenses as outlined in IRS Code Section 213(d). Individual medical insurance premiums and Medicare supplemental insurance premiums will also be reimburesible by these HRAs.
If this legislation is passed it will provide small employers an additional opportunity to assist employees with their healthcare expenses while staying within their budget.
myCafeteriaPlan will continue to provide updates as more information is available on the status of The Small Business Healthcare Relief Act.
BusinessPlans, Inc. – myCafeteriaPlan does not intend to provide legal or tax advice and information contained in this article should not be interpreted as such. Regulations governing pretax plans are often open to interpretation and should be reviewed with your legal or tax advisor before making any decisions regarding your plan.