Proposed Regulation Will Make Employee Benefits Easier & More Affordable in 2020

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There's good news on the horizon for U.S. employers. On Tuesday, the departments of Labor and Treasury, along with Health and Human Services (HHS), released a proposed rule that will allow employers to use Health Reimbursement Arrangements (HRAs) to help pay for their employees' individual health insurance premiums on a pre-tax basis. The proposed rule will go into effect in 2020.

HRAs have been around for a while, but due to the restrictions put into place prior to the implementation of the Affordable Care Act (ACA), they haven't been widely used. In December, 2016, President Obama signed the 21st Century Cures Act, which made it simpler for small employers (those with 50 or fewer full-time employees) to give money to their employees to purchase individual health insurance on a pre-tax basis. The Trump administration is proposing to roll back the restrictions on the use of HRAs, making the pre-tax benefit once more an option for businesses of all sizes; aiming to broaden consumer choices and lower costs for businesses. 

The proposed rule also allows employers who offer traditional group health coverage to fund an HRA of up to $1,800 per year to reimburse employees for certain qualified medical expenses, including standalone dental plans or premiums for short-term insurance plans. 

As always, we will keep you up-to-date on the progress of this proposed regulation. Gravie has been helping employers offer better, more affordable benefits since 2013 and currently offers several pre-tax employee benefits solutions for businesses of all sizes. To learn more, contact us today.