Up until a few weeks ago, the Health Reimbursement Arrangement (HRA) was pretty much a non-issue for small businesses. However, there was a recent amendment introduced by a group of legislators entitled the Small Business Healthcare Relief Act. If it passes, small businesses would be allowed to reimburse employees for health insurance and medical expenses through an HRA. This article will talk about what exactly this bill has to offer, the bipartisan group who created it, and its current chances of passing.
What Exactly Does This Bill Propose?
A standalone HRA is an agreement between employers and employees, where the specific medical expenses and health insurance premiums can be reimbursed tax-free. Currently, this is unavailable, although it is something that has been used in the past.
The Small Business Healthcare Relief Act will effectively bring back standalone HRAs for small businesses. If it were to pass, it would be beneficial for both the employer as they are able to do this pre-tax, as well as employees as they would likely receive better health benefits as a result.
Currently, small businesses with less than 50 full-time employees are not required to provide health insurance. The HRA bill aims to allow these companies to provide affordable health care to its employees, without jeopardizing their financial stability.
Who Introduced the Bill?
There were four lawmakers involved in the conception of the Small Business Healthcare Relief Act. Of these four lawmakers, they are split between the two main parties with two Republicans and two Democrats.
Senator Chuck Grassley (Iowa) and Congressmen Charles W. Boustany, Jr. (Louisiana) are the two Republicans involved. Senator Heidi Heitkamp (North Dakota) and Congressman Mike Thompson (California) are the two Democrats involved.
It is important to note the bipartisan support for the legislation, as this is often a key factor in any bill succeed in both the House and Senate – simply because it means both parties are likely to be in agreement.
Will the HRA Legislation Succeed?
The legislation was introduced to the Senate and House not too long ago, so it is still in the earlier stages. The Senate and House have both referred the bill to separate departments, being the Committee on Finance and the Committee on House Education and the Workforce respectively. Basically, they are requiring the bill to pass through these committees before they vote on whether or not to pass it through.
Now that you know what the HRA legislation entails, you are likely going to want to keep up to date on its status. Either it will pass through the committees, or it may receive no action and effectively die off when the congressional session has ended.
Regardless of what happens, this is something that any small business owner will want to be watching and paying close attention to see what the final result is. Even if the bill does not pass this time around, there is still a possibility of another revised legislation being proposed afterwards.
For information on how your business can prepare for this legislation, as well as other tax and payroll related questions, contact TRAXPayroll today.