North Carolina Business Coalition on Health

Expansion of Healthcare Coverage for Small Business Through HRA

June 13, 2019:  The U.S. Departments of Health and Human Services, Labor, and the Treasury issued a new policy that will provide hundreds of thousands of employers, including small businesses, a better way to provide health insurance coverage, and millions of American workers more options for health insurance coverage. 

This is great news for many small businesses.  In a nutshell, this regulation which takes effect January, 2020, provides for the following:

  • Employers will be able to use individual Health Reimbursement Accounts (HRAs) to provide workers with tax-preferred funds to pay for health insurance coverage the worker purchases in the individual market. 
  • Creates an excepted benefit HRA which, in general,  permits employers that offer traditional group health plans to provide and excepted benefit HRA of up to $1,800 per year, even if the employee doesn’t enroll in a traditional group health plan, and to reimburse an employee for certain qualified medical expenses, including premiums for vision, dental, and short-term, limited-duration insurance.  

Especially for small businesses who have struggled with the high cost of providing coverage, or who offer limited options, this will allow them to provide a tax-preferred benefit with choices to their workers through the individual marketplace.

Click here for the press release from the U.S. Department of Health & Human Services

Click here for the final rule

Or click here for the pdf with FAQs about the new options it provides for Employers and Employees