As it is with most events in the field of law, news is reacted to a bit slowly (probably as long as it takes for the gen pop lawyers to interpret the law), and while the HRA amendments were signed in December of 2016, many small business owners are still unaware of its benefits - or even existence!
What Is It?
Let’s begin with what it is. More than just a mouthful, QSEHRA (qualified small employers health reimbursement arrangement) allows for small business employers to be able to reimburse their employees for health costs pre-tax. This is a big deal because previously, the ACA had seriously limited employers’ ability to reimburse their employees for their health insurance costs through HRAs (health reimbursement arrangements). Allowing employers to maximize their offers to potential employees gives them the edge they need to see through the potential of their company and perform at their best.
Does It Apply To Me?
And how does it work? It works like any other reimbursement arrangement; company builds a budget > employee makes a purchase > employee provides proof of purchase to company > company issues reimbursement... only these exchanges are payroll and income tax free, if the employee has insurance. If the employee lacks insurance, he must report the reimbursement at the end of the year as taxable income.
It applies to you if you own a company that employs fewer than 50 full time equivalent employees, and doesn’t offer a group health policy for said employees.
“My Employees Don’t Have It, Nor Do They Need It”
Yes, yes, we’ve heard. Your company is so haute, it’s an honor to be considered for a position there, why offer your employees more? We know you’ve heard the phrase “you catch more flies with honey”....
If you’re in the business of success you don’t have the time or luxury to put entitlement at the top of your to-do list. If you’re in the business of success you must be in the habit of doing whatever it takes to have your company running as smoothly and efficiently as possible and that requires skilled, in-demand employees. Employees that will, without a doubt, hear of other offers elsewhere, and while they may not need it, if it’s being offered, there’s no reason for them not to take it.
They don’t need it? Perhaps not, but how badly do you need them?
Start reimbursing your employees today by clicking this link.