REP. THOMPSON’S SMALL BUSINESS HEALTHCARE RELIEF ACT PASSES HOUSE
Washington, D.C. – U.S. Rep. Mike Thompson’s (CA-5) bipartisan legislation, the Small Business Healthcare Relief Act, passed the House of Representatives today as a part of a larger bill, the 21st Century Cures Act (H.R. 34), which combined a number of healthcare provisions.
Thompson’s legislation would allow small employers to continue to offer Health Reimbursement Arrangements, or HRAs, as a benefit for their workforce. Employees can use the account to pay insurance premiums, or pay for qualified health expenses. The law gives small employers who are not obligated to offer health insurance a way to help employees purchase a quality, affordable health insurance plan that fits their individual budget and healthcare needs. The bill changes Treasury Department rules limiting the use of HRAs for small businesses.
Thompson’s legislation was included in the bill text of the 21st Century Cures Act, a package of bipartisan, bicameral health provisions. The bills included in the package will improve our mental health system, provide funding for opioid abuse programs and strengthen the Medicare program for millions of beneficiaries. Further, the legislation will provide more than $4 billion in additional funding to the National Institutes of Health to support Vice President Biden’s Cancer Moonshot and other initiatives. Finally, the bill streamlines the Food and Drug Administration’s review of medical products to bring much-needed treatment to patients faster, while protecting the high standards of the drug and device approval processes.
“By allowing small business owners to offer the support of an HRA, my bill will help small business owners who want to do right by their employees and offer health benefits despite not have the capacity to provide employer-sponsored coverage,” said Thompson. “MySmall Business Healthcare Relief Act will make a big difference for hard-working folks across our country, and I’m proud to see my legislation included in the broader 21st Century Cures Act, which will help us make significant progress when it comes to keeping Americans healthy, and keeping America on the forefront of medical innovation.”
"As a key driver of efforts to include HRAs in some type of year-end legislation, the National Association of Home Builders (NAHB) was thrilled to see it added to the 21st Century Cures Act. We applaud Representatives Thompson and Boustany for championing this cause and pushing to get the bill approved," said NAHB Chairman Ed Brady, a home builder and developer from Bloomington, Ill. “This is a critical step in allowing small business owners to provide health care for their employees and protect employers against outrageous fines.”
On September 13, 2013, The Department of Treasury issued guidance disallowing businesses from using HRA’s as a tax-free means to reimburse employees, stating these arrangements were disqualified under Affordable Care Act’s annual dollar cap.
The Small Business Healthcare Relief Act restores flexibility and choice into the marketplace by:
- Ensuring that small businesses are allowed to use pre-tax dollars to give employees a defined contribution.
- Allowing employees to use these funds as an HRA to purchase health coverage on the individual market, as well as for qualified out-of-pocket medical expenses.
- Protecting small business employers from being unnecessarily financially penalized for providing this option to employees.
The legislation is budget-neutral, meaning it won’t add a single dollar to our deficit. The bill is supported by the United States Chamber of Commerce, the National Federation of Independent Business (NFIB), the National Association of Manufacturers (NAM), the Retail Industry Leaders Association (RILA), the National Association of Homebuilders (NAHB), the National Association for the Self-Employed, and the Coalition for Affordable Healthcare (CAHC).
The Small Business Healthcare Relief Act previously passed the House of Representatives in June as H.R. 5477.
The 21st Century Cures Act now goes to the Senate for consideration and passage.