A health reimbursement arrangement, or HRA, is a benefit plan you can offer to your employees to reimburse them for medical expenses that are not covered by an insurance plan. HRAs offer tax benefits, including the deductibility of contributions you make to your employees’ accounts. Since the Affordable Care Act (ACA) took effect, if you employed 50 or fewer workers, your ability to provide HRAs to your employees may have been limited. However, a law passed in December 2016 created a new type of HRA that you can offer if you do not provide group health insurance.
The 21st Century Cures Act allows “stand-alone” HRAs if the accounts meet funding and other requirements. These new HRAs allow you to help your employees pay for medical costs, such as the reimbursement of premiums for policies purchased on the healthcare exchange. In addition, the Act extends relief from the $100 per day penalty for prior arrangements that did not meet Affordable Care Act rules.
Please contact us for more information about this new employee benefit option. This discussion could be crucial given the uncertainty of future ACA rules.
Gilliland & Associates, PC is a full-service CPA firm specializing in tax planning for individuals and businesses in the Northern Virginia area. We are based in Falls Church, VA and also service clients in McLean and Tysons Corner, VA. Gilliland & Associates is known for our superior knowledge and aggressive interpretation and application of tax laws. We help you keep more of your earnings by finding you the lowest possible tax on your business or personal tax return. You can connect with us on Google+, LinkedIn, Facebook, and Twitter