Passage Of The 21st Century Cures Act Brings Small Business Healthcare Relief
On Tuesday, President Obama signed the 21st Century Cures Act into law, a bipartisan bill supporting the acceleration of new drugs research, investments in medical research and other issues. PPAI lent its support to the Small Business Healthcare Relief Act, part of the larger bill. The Small Business Healthcare Relief Act eliminates a penalty of $100 per day per employee on employers that fail to offer group health plans despite the employer providing tax preferred dollars through a health reimbursement arrangement for their employees.
New rules by the Internal Revenue Service that took effect on July 1, 2015, dictated the placement of a $100 per day per employee penalty on employers that failed to offer a group health plan, despite the employer providing tax preferred dollars through a health reimbursement arrangement for their workers to pay health insurance premiums or other direct medical expenses. Considered a violation of the Patient Protection and Affordable Care Act, employers would be liable for an excise tax that could reach up to $36,500 per year per employee potentially reaching a max penalty of $500,000 in total.
PPAI and other organizations lent their support to the Small Business Healthcare Relief Act (H.R. 5447), sponsored by Reps. Charles Boustany (R-LA) and Mike Thompson (D-CA). H.R. 5447 and S.3060 in the Senate, and additionally, the 21st Century Cures Act, for which the Small Business Healthcare Relief Act is a part of, ensure qualified small business employers can use health reimbursement arrangements to aid employees without the burden of compliance requirements and their associated penalties.