Today, the House is considering positive legislation allowing small employers the flexibility to offer pretax dollars to help pay premiums and/or other out-of-pocket costs associated with medical care and services. The Small Business Health Care Relief Act (H.R. 5447), sponsored by Reps. Charles Boustany (R-LA) and Mike Thompson (D-CA), allows employers with fewer than 50 employees to provide Health Reimbursement Arrangements (HRAs) to employees with health insurance.
Effective July 1, 2015, an IRS guidance placed a $100-per-day, per-employee penalty for employers that fail to offer a group health plan but provide tax-preferred dollars through an HRA for their workers to pay health insurance premiums or other direct medical expenses. The Small Business Health Care Relief Act allows small businesses—that are not required by the Affordable Care Act to provide health insurance—to provide some assistance to their employees and provide these HRAs. This simple, logical and bipartisan change will increase coverage, improve flexibility and promote wellness for manufacturers and other small employers.
The NAM recently signed onto a letter encouraging passage of this legislation in the House, and we urge action in the Senate.
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