Proposed Rule on HRA Flexibility Improves an Important Health Coverage Tool for Small Businesses

By at 24 October, 2018, 1:04 pm



Washington, D.C. – On October 23, the Department of Labor issued a proposed rule on health reimbursement accounts (HRAs) that provides more flexibility for their use among small businesses.  Small Business & Entrepreneurship Council (SBE Council) president & CEO Karen Kerrigan said this type of flexibility is exactly what small businesses need to offer and continue coverage for their employees.

“The Administration continues to produce a host of rulemakings and policy initiatives that will give entrepreneurs and small businesses more affordable and flexible options for health coverage. The proposed rule on HRAs is no exception. The proposal will allow for more flexibility in the use of HRA funds, which vastly improves this important tool for small businesses.  SBE Council appreciates the work of the Administration in developing more practical and affordable options that will help cover more people employed by small businesses, and improve the competitiveness of these firms,” said Kerrigan.

Under the proposal, small businesses would be allowed to use HRA funds to provide offsets for premiums purchased by their employees in the individual market. Current rules in Obamacare do not allow employers to provide this type of financial support for employees. Employers who offer traditional group coverage would also be allowed to provide an HRA of up to $1,800 per year (indexed to inflation) to reimburse an employee for certain qualified medical expenses, including standalone dental benefits and premiums for a short-term health insurance plan for those employees who choose not to participate in the traditional coverage option offered by an employer.

Read the proposed rule here and the DOL FACT SHEET here.

Improving HRAs is one of SBE Council’s key health care priorities for 2018. Already, the Administration has acted on two other top policy priorities, including the creation of Association Health Plans and improved Short-Term Limited Duration health plans.

Related Content:

Kerrigan in Morning Consult: Small Business Needs Big Shot of Disruption in Health Care Marketplace.  


CONTACT:  Karen Kerrigan  

SBE Council is a nonpartisan, nonprofit advocacy, research and education organization that works to protect small business and promote entrepreneurship. For nearly 25 years SBE Council has worked to successfully implement a range of policy and private sector initiatives to strengthen the ecosystem for startups and small business growth. To learn more, visit SBE Council’s website: Follow on Twitter: @SBECouncil 

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