December 9, 2016
ACCA, the Indoor Environment & Energy Efficiency Association, is pleased to announce that the Senate passed the 21st Century Cures Act, a comprehensive health care package, which included a top ACCA priority, earlier this week. The bill included a provision to allow employers to once again provide Health Reimbursement Arrangements (HRAs) to help their employees pay for health insurance. The House approved the bill last week and after the 94 to 5 Senate vote President Obama is expected to sign the bill into law. This is a major victory for our nation's heating, ventilation, air conditioning, and refrigeration (HVACR) contractors.
“ACCA and our members have been pressing Congress to reinstate the use of HRAs since the IRS issued guidance prohibiting their use as part of Obamacare's implementation” said Barton James, ACCA's senior vice president of government relations. “The overwhelming bipartisan support for this legislation is a testament to ACCA members' voices being heard by Congress. The small business community made it clear their desire to restore the use of HRAs to help their employees with rising health care costs. At the same time, this bill will protect employers against outrageous fines for providing this cost-sharing option to their workers.”
HRAs allow small businesses to offer pre-tax dollars to insured employees to help pay premiums and/or other out-of-pocket costs associated with medical care and services. Most ACCA member companies do not have human resource departments or benefits specialists, so HRAs have served these businesses as an easier way to help their employees to obtain health coverage.
The Obama Administration issued guidance through the IRS in 2013 stating that employers were no longer able to use HRAs, because they don’t meet the requirements of the Affordable Care Act. Not only did the Administration make HRAs illegal, they made employers face the possibility of fines of $100 per day per employee if they offer this benefit to their workers. That can add up to $36,500 per employee over the course of a year. This $100 per day penalty went into effect on July 1, 2015.
ACCA has been working independently and with a diverse coalition of other business organizations to right this wrong by calling on the IRS to revoke its ruling on the use of HRAs and pushing for a congressional solution. At ACCA's urging, a section was added to the 21st Century Cures Act that would reinstate the use of HRAs and rescind the punitive IRS penalties associated with them.
If you have questions about the 21st Century Cures Act, please contact Barton James at email@example.com.