March 2015

Protect Health Reimbursement Arrangements (HRAs)

Wednesday, March 25, 2015

In September 2013, the Departments of Treasury, Health and Human Services, and Labor, released Technical Release No. 2013-03, ”Application of Market Reform and other Provisions of the Affordable Care Act to HRAs, Health FSAs, and Certain other Employer Healthcare Arrangements.”

The guidance stipulates that an employer that offers an HRA to two or more employees, but does not offer a group health care plan, is not compliant with annual limit regulations and the business would be subject to penalty. However, a single employee business can still offer an HRA plan and would not run afoul of compliance issues under the ACA.

For the past year, the NASE along with several other organizations have been aggressively pushing Congress to address the action by the Departments of Treasury, Health and Human Services, and Labor, that grossly restricted the use of Health Reimbursement Arrangements (HRAs) by the self-employed and micro-business community.

Before the 113th Congress adjourned on December 31, 2014, Representatives Boustany (R-LA) and Thompson (D-CA) introduced legislation that would allow for standalone health reimbursement arrangements (HRAs) for small employers (with 49 employees or less). The legislation will be re-introduced in the new 114th Congress in both the Senate and House.

Due to the NASE’s efforts to bring awareness to this issue, specifically in two meetings with U.S. Treasury Secretary Jack Lew and U.S. Health and Human Services Secretary Sylvia Burwell, the Department of Treasury announced that they would hold off enforcing the penalty against those small businesses that are currently not incompliance with the technical guidance issued in 2013.

The NASE is working with our partners along with House and Senate members to move our supported legislation forward so that no small business is burdened with a penalty assessment by the IRS and we can ensure the self-employed and small business community can continue to use a valuable tool that helps cover the costs health insurance for their employees.

Katie Vlietstra is NASE’s Vice President for Government Relations and Public Affairs


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