HRA PLANS NOW POSSIBLE FOR SMALL BUSINESSES
Even if your practice has fewer than 50 employees, new federal legislation that took effect January 1 offers you the opportunity to set up a Health Reimbursement Arrangement Plan (HRA) as an employee benefit. As part of the 21st Century Cures Act, your practice may be able to set up a Qualified Small Employer Health Reimbursement Arrangement.
The new small business HRA Plan operates similarly to HRAs set up by larger businesses. Your employees purchase their own health insurance and your practice reimburses them, tax-free, for their health insurance and medical expenses.
SOME KEY REQUIREMENTS
– Your practice has fewer than 50 “full-time equivalent” employees. You can check eligibility and calculate that threshold on the IRS website. {https://www.irs.gov/affordable-care-act/employers/determining-if-an-employer-is-an-applicable-large-employer}
– Your practice does not offer group health coverage to employees
– You are required to offer the same HRA health plan to all full-time employees; you can exclude or limit seasonal and part-time employees
– Your reimbursements are capped at $4,950 for each individual or $10,000 for each family, yearly
– Your employees are required to get their own “minimum essential” health insurance, and prove they are covered
– Your employees can use the HRA to help offset their insurance premiums, co-pays and other out-of-pocket medical, dental and vision expenses
– Your employees have flexibility in their health insurance including buying individual plan(s), being on a spouse’s plan or being on a parent’s plan
OPTIONS AND NEXT STEPS
To find out if a Small Business HRA makes sense financially for your practice and your employees, touch base with your CWA advisor and we can explore that possibility together.
