21st Century Cures Act

The President just signed into law the 21st Century Cures Act which gives small employers (those with fewer than 50 full-time employees) new options for providing health coverage.

Small employers can provide a “qualified small employer health reimbursement arrangement” (QSEHRA) if they do not offer any other health plan.  The QSEHRA is an employer-funded HRA (no salary reduction contributions).  The account can be used for an employee’s medical care, including health care expenses and insurance premiums.  The maximum permissible QSEHRA contribution is of $4,950 per year for single coverage or $10,000 per year if family members are covered (indexed for inflation).  Contributions to the account may be excluded from an employee’s income if the employee has minimum essential coverage. 

The new QSEHRA option applies to plan years beginning after December 31, 2016.  An QSEHRA may be desirable for small employers who do not want to offer standard health insurance options but do want to help employees pay for health coverage. 

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