NLBMDA has signed on to a multi-industry letter in support of the Small Business Healthcare Relief Act (H.R. 2911), which will ensure small business owners can use Health Reimbursement Arrangements (HRAs) to assist employees with out-of-pocket health insurance and healthcare costs. However, the Affordable Care Act (ACA) has made it illegal for small businesses to use pretax dollars to assist employees with the purchase of individual health insurance policies.
Because HRAs are reimbursement arrangements, they violate rules under the ACA for employers to provide first dollar coverage of preventive services and no annual dollar limits on essential health benefit rules and are therefore unlawful on a stand-alone basis
Historically, many small business owners directly paid for or reimbursed employees for medical care and services through an employer payment plan, such as a HRA. The Department of Treasury has ruled that such reimbursements constitute a group health plan, subjecting violators to fines of up to $36,500 annually per employee.
Click here to view the letter.