H.R. 34 containing provisions that establish Small Business HRAs (SBHRA) was signed into law on December 13, 2016.
What does this mean to you and your Clients who own small businesses? That employers with more than one but fewer than 50 full-time employees can once again use a Health Reimbursement Arrangement (HRA) to assist employees with health insurance premiums and out-of-pocket medical expenses without sponsoring Group insurance. (Integrated and One Employee HRA Plans are already compliant with federal law.)
- You can begin providing tax relief to Clients who were previously ineligible for HRA health & welfare benefit Plans as early as January 1, 2017. Contact your Microbusiness Regional Sales Director today to find out how we can help.
- It’s important to know that HRA Plans require your Clients to plan ahead. Here are some key things to be aware of:
- Clients can write off insurance premiums beginning the first of the year in which they enroll.
- But they cannot write off out-of-pocket medical expenses until the first of the month in which they enroll.
- The earlier your Clients sign up during a calendar year, the more they’ll save on their taxes.
Healthcare Reform will continue to bring BIG changes that will affect you. TASC has you covered.
Upcoming changes to the nation’s Healthcare Reform legislation (Affordable Care Act) will continue to impact employee health & welfare benefit Plans. Not only will TASC continue to implement the necessary changes and administrative process updates to comply with changing law, we’re proud of the fact that our own legislative team led the charge in getting this law passed!
Plus, we’ll continue to monitor and respond to additional employee benefit legislation and keep you informed and in compliance. Subscribe to our Capital Connection blog at http://www.tasccapitalconnection.com and you’ll receive email notifications whenever there’s a post about changes to federal and state government policy.
Here are just a few recent examples of how TASC’s pro-participant, pro-Client stance helped to protect small business owners:
- In 2013, IRS Notice 2013-54 was passed requiring HRAs with more than one eligible employee to be integrated with Group health insurance. TASC’s Legal and Governmental Affairs team spent countless hours researching this provision before offering compliant solutions for small business owners who had individual insurance. Clients who enrolled in our Non-Employer Sponsored Premium (NESP) and Non-Excepted Flexible Spending Accounts (NEFSA) received three additional years of tax savings (2014, 2015, and 2016).
- On December 16, 2015, the IRS provided further guidance on the application of Group health plan market provisions in the form of IRS Notice 2015-87. This provision required TASC to suspend the sales of its NESP/NEFSA Plans and survey Clients to determine the compliance of their Plans. TASC has spent the past year transitioning or cancelling non-compliant Plans. UPDATE: While the NESP/NEFSA Plan is still non-compliant, TASC will reach back out to these impacted Clients to inform them of the new SBHRA tax-advantaged benefit option.
Look to TASC as your back-office partner. TASC will continue to monitor and respond to the nation’s Healthcare Reform legislation. We will make every effort to avoid posing financial harm to our customers. And, as always, TASC will guarantee and defend Clients with compliant Plans.
Please stay tuned for further updates.