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NASE Responds to Delay of HRA Guidance

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CONTACT:  Kristofer Eisenla, LUNA+EISENLA media
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Stresses Need for Permanent, Bipartisan Legislative Solution Introduced by Reps. Boustany and Thompson

WASHINGTON, DC – Katie Vlietstra, Vice President for Government Relations and Public Affairs for the National Association for the Self-Employed (NASE), the nation’s leading advocate and resource for the self-employed and micro-business community, today offered the following reaction to the U.S. Department of the Treasury’s announcement that it is delaying the enforcement of the technical guidance issued in September 2013 regarding Health Reimbursement Arrangements (HRAs), a key health care tool for America’s smallest employers. 

“The announcement today by the Treasury Department that it has offered a short-term delay in the enforcement of a prohibition on Health Reimbursement Arrangements is welcome news for our community, but a long-term, legislative solution is still urgently needed.  America’s smallest employers need the stability of a permanent fix in order to continue to utilize this critical tool to help provide health care coverage to their employees.   

“We support Congressmen Boustany and Thompson’s plans to re-introduce their bipartisan legislation focused on offering a permanent correction to this issue.  This bipartisan legislation would order the IRS to reverse its regulation preventing small businesses from providing standalone HRAs so that they can support their employees and help them obtain affordable health care. Their legislation, combined with the momentum by Senate Republicans and Democrats to address this issue, will help millions of small business owners and should be passed by Congress as soon as possible. 

“HRAs have long-been used to help small business owners provide some level of financial support for their employees. As an unintended consequence of the Affordable Care Act (ACA), the prohibition placed upon the use of HRAs is detrimental to small businesses and their employees across the country.  Although we welcome this temporary, first step, we look forward to working with members on both sides of the aisle in Congress on a more permanent solution to this situation.”

NASE is a leading supporter of the Small Business Healthcare Relief Act, which would allow for standalone health reimbursement arrangements for small employers (49 or less employees) championed by U.S. Reps. Charles Boustany (R-LA) and Mike Thompson (D-CA). In fact, NASE has been active in advocating for a long-term solution to this issue with members of the Obama Administration, including Health and Human Services Secretary Sylvia Burwell.

For over a decade, HRAs have been a key tool for small employers to provide their employees with minimal financial assistance for qualified health care expenses.  With the implementation of the Affordable Care Act (ACA) and the 2013 decision by the Departments of Treasury, Health and Human Services, and Labor to tie key lifetime or annual limits and coverage of preventive health services to small employers offering an HRA was a gross infringement on the small business community.  The change resulted in a particularly negative impact on small employers with 49 or less employees that are under no legal obligation to provide a qualified healthcare plan for their employees under the employer mandate of the ACA.  When the technical guidance was issued, NASE submitted a draft responseillustrating its affect on the small business community.