21 Century Cares - new healthcare option for small employers

I wondered if anyone had done much research into the latest bill Obama
signed into law earlier this week.
Here is some info:
http://www.forbes.com/sites/coxbusiness/2016/09/26/how-small-businesses-can-
prosper-by-properly-managing-new-technology/#347342c421de

Are any of you with a small (under 50) staff considering this option for
2017? Looks like a good way to get payroll taxes down if this were offered
alongside slight salary adjustments. Or as a replacement for your group
plan if you offer one.
Thoughts? Potential hazards?



Regards,

Lacey Morgan
Office: (940) 322-3777 | Cell: (940) 782-8252

Comments

  • This message was originally HTML formatted. View in a HTML capable client to see the original version.\r\n\r\n Sorry, I somehow grabbed the wrong link to the story I was referencing.
    http://www.forbes.com/sites/robbmandelbaum/2016/12/14/repealing-obamacare-just-got-harder-thanks-to-small-business-relief-in-21st-century-cures-act/#649d6c0a47b0




    Regards,

    Lacey Morgan


    office: (940) 322-3777 | cell: (940) 782-8252 | fax: (940) 723-8081 | www.careteamhc.com | www.seniorselecthc.com
  • Great question, Lacey. I read some things about the 21st Century Cures Act
    several weeks ago just after it was signed. It appears that the law is a
    giant government give-away to various interest groups, and the provision
    for allowing HRA’s – Health Reimbursement Arrangements – was buried in the
    back of the law. I’ve not seen or heard any detailed analysis of this law
    yet, so we’ll see what happens with it.



    Being able to use an HRA will be helpful to small companies who can’t
    compete with companies over 50 employees because they are not offering a
    health insurance plan. It will be interesting to see how this is
    implemented and whether it will survive the replacement of ACA.



    What do you think Lacey? What brought it to your attention?





    Stephen



    *Stephen Tweed, CSP*

    *CEO*

    *Leading Home Care … a Tweed Jeffries company*

    *9750 Ormsby Station Road, Suite 205*

    *Louisville, KY 40223*

    *502-339-0653*

    *www.leadinghomecare.com *

    *www.homecareCEO.com *



    *Grow Your Business, Get Ready for the Future!*
  • We are just under the 50 full time count, so aren’t under the employer mandate. Most of my full time office staff have their own individual health insurance plan they pay for out of their take-home salary. With this being such a recently new option, I was just curious what it could mean for businesses of my size. I would love to be able to offer this as a benefit, but there are so many details I haven’t been able to find answers about. For example:

    · Does the HRA allowance ONLY cover premiums, or other health expenses? E.g., “Under the legislation, the HRA can pay or reimburse for any documented healthcare expense, as defined in Section 213(d) of the Internal Revenue Code for employees who are covered on individual health insurance. What is not clear is if this new kind of HRA will have the same flexibility as existing HRAs or MERPs where an employer could limit what benefits would be paid”
    · How does an employer calculate the amount for each employee? It appears the rates would fit the “going rate” of a Bronze/Silver type plan in your market.
    · What IRS forms, if any, are required for the employer or employee?
    · Is the employer responsible for knowing if the employee did purchase insurance, and what if they stop paying their premiums or let coverage lapse mid-year? Is that worked out with IRS at tax time. Is employer responsible? Does the amount given to employee have to equal monthly premiums to the penny?
    · Does this have an “enrollment period”? Do you have to start Jan 1? Once an employer starts this, can they stop it at any time?
    · Other hidden concerns?

    I’m curious about how this could be structured. How many employers will actually cut back salaries or bonuses in lieu of the HRA reimbursement? This could be structured so there is no change in the employees’ take-home pay, but the taxable portion would be lower, both for the employee (income tax) and employer (payroll tax). And if an employer did this, what would be the ramifications?


    For anyone interested, here are some other articles that I found this morning.
    These answered some of my quesitons... and also created brand new ones:

    https://www.linkedin.com/pulse/cures-act-legalizes-defined-contribution-individual-plans-johnson

    http://www.employeebenefitadviser.com/opinion/tread-carefully-on-new-hra-law-allowing-individual-coverage-reimbursements



    Regards,

    Lacey Morgan
    Office: (940) 322-3777 | Cell: (940) 782-8252
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