By SEMA Washington, D.C., Staff
The U.S. Congress passed legislation allowing small employers with 50 or fewer employees to provide Health Reimbursement Arrangements (HRAs) to their employees as an alternative to providing health insurance. HRAs are employer-funded, tax-advantaged health benefit plans used to reimburse employees for out-of-pocket medical expenses and individual health insurance premiums. A qualified small-employer HRA must be provided on the same terms to all eligible workers and be funded solely by the employer without salary reduction contributions. Without the legislation, certain HRAs were threatened by a potential Internal Revenue Service fine of $100 per day for companies that used HRAs as an alternative to providing health insurance. The legislation was included in a larger medical research bill that the President is expected to sign into law.
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