Dec 16, 2014
Press Release

WASHINGTON, D.C. – U.S. Rep. Mike Thompson (D-CA) has introduced H.R. 5860, the bipartisan Small Business Healthcare Relief Act with Congressman Charles W. Boustany, Jr., M.D., (R-South Louisiana). This legislation fixes an existing Treasury Department guidance under the Affordable Care Act that limits the use of health reimbursement arrangements (HRA’s) for small businesses, limiting choice and affordability for healthcare consumers.

“Since the landmark health care reform legislation was passed, we’ve focused too much time trying to undermine the law, and far too little time working to build on its important reforms so that all Americans can afford health insurance,” said Thompson. “This bipartisan legislation moves past party politics, fixes an important part of the health care law, and improves choice and affordability. By building on the reforms made in the Affordable Care Act, like this legislation does, we can make sure every American can afford to go to the doctor – and that’s what matters.”

On September 13, 2013, 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 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). Support letters from these organizations are attached.

The legislation has been referred to the House Committee on Ways and Means, on which Thompson and Boustany serve.


Congressman Mike Thompson is proud to represent California’s 5th Congressional District, which includes all or part of Contra Costa, Lake, Napa, Solano and Sonoma Counties.  He is a senior member of the House Ways and Means Committee and the House Permanent Select Committee on Intelligence. Rep. Thompson is also a member of the fiscally conservative Blue Dog Coalition and chairs the bipartisan, bicameral Congressional Wine Caucus.


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