New federal law expands opportunities for small business health insurance for employees

New federal law expands opportunities for small business health insurance for employees

Just when you thought that nothing new was being offered through the ACA….

A major development for Small Businesses with less than 50 FTE employees!

An employer can now make contributions for their employees to help offset expenses and premiums associated with health care coverage.

President Barack Obama on Dec. 13 signed into law the 21st Century Cures Act, which will let small businesses use health reimbursement arrangements (HRAs) to fund employees who purchase individual health plans on the open market.

The legislation allows small employers with fewer than 50 full-time employees or equivalents that don’t sponsor a group health plan to fund employee HRAs to pay for qualified out-of-pocket medical expenses and for nongroup plan health insurance premiums, including for plans purchased on public health care exchanges under the Affordable Care Act (ACA).

The maximum reimbursement for health expenses that small employers can provide through employee QSEHRAs is $4,950 for single coverage and $10,000 for family coverage.

Both employees who are eligible for subsidies and those who exceed the subsidy earning limit are eligible for this program.

This is a valuable tool for Small Businesses trying to recruit and retain valued employees. It allows them to compete more successfully with large companies offering health benefits.

For more information, contact Brad at brad@scsbc.org or 803-252-5733.