As part of the 21st century Cures Act health reimbursement accounts(HRA) were restored for small businesses yesterday. Qualified small employer health reimbursement arrangements are now exempt from the Affordable Care Act group health plan requirements. Without the exemption the small businesses using a HRA would face severe penalties for having a non-compliant “group health plan”. The small business I work at terminated their health reimbursement account at the end of 2014. They replaced it with a monthly cash bonus.
Will Health Reimbursement Accounts Make A Comeback In 2017?
My boss indicated that he would like to offer a Health Reimbursement Account in 2017. Potentially this sounds like a good deal even if we have to give up our bonuses. Pretax money goes about 20% farther. The problem is in the details.
- What happens if you have a subsidized health insurance plan purchased through ACA exchanges? Zane Benefits implies that HRA payments will lower the premium tax credit. If the HRA amount is greater than the premium tax credit the employee will get a small benefit. Otherwise the only beneficiary is the government.
- What happens if an employee wants to self-insure? Zane Benefits implies that the employee needs an ACA compliant health insurance plan to claim qualified out-of-pocket medical expenses.