PPAI Adds Its Voice In Support Of The Small Business Healthcare Relief Act
On Tuesday, PPAI signed a letter directed to the chairs of the U.S. House of Representative’s Committee on Ways & Means, and the Heath and Tax Policy Subcommittees, encouraging their consideration of the Small Business Healthcare Relief Act (H.R. 2911). The legislation would protect small businesses from punitive fines for helping employees with health care costs and restore their ability to provide a flexible and valued benefit.
PPAI and more than 60 other organizations are supporting H.R. 2911 to allow employers to provide employees with a defined financial contribution toward the cost of health care coverage. Employers could provide employees with a set dollar amount to use on a tax-preferred basis when purchasing health care coverage.
The letter notes that historically, many small-business owners directly paid for or reimbursed employees for medical care and services through an employer payment plan, such as a Health Reimbursement Arrangement (HRA). However, the Affordable Care Act (ACA) requires that all group health plans meet certain benefit requirements, such as first dollar coverage of preventive services and no annual dollar limits on essential health benefits. Because HRAs are reimbursement arrangements, they violate these rules according to the IRS and are therefore unlawful on a stand-alone basis.
H.R. 2911 currently has 77 bipartisan cosponsors, including 28 House Ways & Means Committee members. The legislation would allow small businesses with fewer than 50 employees to offer employer payment plans and HRAs to employees for the payment of premiums or qualified medical expenses associated with insurance coverage without facing fines.