21st Century Cures Act Eases Small Employer ACA Restrictions
Author: Marta Moakley, XpertHR Legal Editor
December 19, 2016
The 21st Century Cures Act provides relief to small employers regarding certain group health plan requirements under the Affordable Care Act (ACA). Specifically, certain qualified small employer health reimbursement arrangements (QSEHRAs) will be allowed under the Act.
The Act defines qualified small employer health reimbursement arrangement as one that:
- Is solely funded by an eligible employer, so that no salary reduction contributions are made under the arrangement;
- Provides, after the employee provides proof of coverage, for payment or reimbursement of an eligible employee's covered medical care expenses;
- Limits payments for individual coverage to $4,950, or $10,000 for family coverage; and
- Is provided on the same terms to all eligible employees.
In addition, eligible employers will have to notify employees with respect to the arrangement's impact on the amount of a government subsidy for which the employee would be eligible.
The relief applies to an employer that:
- Has fewer than 50 employees and, therefore, would not be subject to the ACA's "pay or play" mandate; and
- Does not offer a group health plan to any of its employees.
The Act's ACA amendments apply to plan years beginning on January 1, 2017. Employers will be required to report their QSEHRA amount on employees' Forms W-2, effective with the 2017 forms that are filed in 2018.
The White House welcomed the Act as an answer to the President's call for a "moonshot" in cancer research in order to accelerate related discoveries, and to combat substance abuse.