Roo is excited to finally present some great news regarding employment law. On December 13, 2016 President Obama signed into law the 21st Century Cures Act. This law provides small employers (50 or less employees) with the option to fund or reimburse an employee’s individual health care plan with pre-tax dollars. This is significant for small employers who do not currently offer a medical plan.
Key components of the law
Key components of the law
- New “stand alone” HRA option for employers to reimburse expenses or fund healthcare premiums
- Increased funding for diseases such as cancer and Alzheimer’s
- Increased funding for addiction prevention and intervention
- Speed time to market for new drug approval
- Ensures mental health parity of benefits
- A QSEHRA enhances the small employer’s ability to recruit and retain client
- Increases employee choice and affordability of care
- Levels the playing field to compete with “big company benefits”
- Offering a QSEHRA (Qualified Small Employer Health Reimbursement Account) is an option, not a requirement
- The effective date of the law is January 1, 2017
- Only employers with less than 50 employees may take advantage of this new option. Larger employers still must comply with the Affordable Care Act (ACA) rules
- The QSEHRA is funded with pre-tax employer dollars (previously prohibited by the IRS and DOL). Employee contributions are not permissible
- QSEHRA dollars may be used to purchase individual insurance or reimburse out of pocket expenses
- Annual employer contributions are limited to $4,950 for single or $10,000 for family coverage
- Employers may limit eligibility to full time employees with up to a 90-day wait period. Employees under the age of 25 may also be excluded
Watch a video of the signing here
Roo will keep you posted with additional details as they become available.