ACA & The New Normal

Relief in Sight for Small Businesses Offering Health Reimbursement Arrangements

NASE Encourages Swift Action of HR 5447;
Small Business Health Care Relief Bill

WASHINGTON, D.C. – The National Association for the Self-Employed (NASE), the nation’s leading advocate and resource for self-employed and micro-businesses, today called on members of the United States House of Representatives Committee on Ways and Means to take swift action by approving the H.R. 5447, Small Business Health Care Relief Act, thereby sending it to the full House floor for consideration.

The Small Business Health Care Relief Act, co-sponsored by U.S. Reps. Charles Boustany (R-LA) and Mike Thompson (D-CA), would allow an employer with fewer than 50 employees not offering group health insurance coverage to establish a health reimbursement arrangement (HRAs) for its employees without penalty. The House Ways and Means Committee is expected to mark-up the bipartisan legislation today.

“Health Reimbursement Arrangements are a powerful and effective tool for the small business community. HRA’s allows small business owners to do the right thing by helping provide financial assistance to their employees for qualified health care expenses,” Katie Vlietstra, Vice President for Government Relations and Public Affairs. “As an unintended consequence of the Affordable Care Act, the Departments of Treasury, Health and Human Services, and Labor, dealt a devastating blow to the utilization of HRAs by placing unrealistic restrictions on their use in the small business community. Thousands of small businesses nationwide, including self-employed and micro-businesses, should be able to use HRAs without limitation. The current penalties for offering them are unfair and jeopardize growth and expansion.”

Bi-Partisan bill provides financial support to small businesses

“We urge the House Ways and Means Committee to approve this bipartisan legislation quickly and allow it to move to the full House floor for passage. It has taken far too long to reverse this unfair penalty on small businesses. The American small business community is counting on our elected leaders to stand up for them and ensure they can continue to help our economy.”

Health Reimbursement Arrangements are a powerful and effective tool for the small business community.

In a recent guest opinion-editorial in the Las Vegas Review-Journal, Vlietstra argued that:

“The threat of IRS penalties has become real, as it could hit small business owners with fees running into the hundreds of thousands of dollars. Small employers cannot afford such outlandish fines and will ultimately be forced to stop offering HRAs.”

In 2015, the Treasury Department announced that it is delaying the enforcement of the technical guidance issued in September 2013 regarding Health Reimbursement Arrangements, a key health care tool for America’s smallest employers.

HRAs have long-been used to help small business owners provide some level of financial support for their employees. As an unintended consequence of the ACA, the prohibition placed upon the use of HRAs is detrimental to small businesses and their employees across the country. The change resulted in a particularly negative impact on small employers with 49 or less employees that are under no legal obligation to provide a qualified healthcare plan for their employees under the employer mandate of the ACA.

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The National Association for the Self-Employed (NASE) is the nation’s leading resource for the self-employed and micro-businesses, bringing a broad range of benefits to help entrepreneurs succeed and to drive the continued growth of this vital segment of the American economy. The NASE Small Business Locator helps identify and connect our nation’s smallest businesses. In addition, NASE’s new health care portal helps small business owners navigate the nation’s health care marketplace. The NASE is a 501(c) (6) nonprofit organization and provides big-business advantages to hundreds of thousands of micro-businesses across the United States. For more information, visit the association’s website at