President Signs HRA Revisions

Yesterday, President Obama signed H.R. 34, which includes a variety of healthcare provisions, including the 21st Century Cures Act and the Peak1-supported HRA provision for eligible small employers. For HRA provision specifics, see page 824, section 18001 of the legislation.

The provision allows for eligible small employers to offer Health Reimbursement Arrangements (HRAs) that are funded solely by the employer to reimburse employees for qualified medical expenses, including health insurance premiums. Now signed into law, our software vendor, Alegeus, anticipates the HRA market will expand to include 10 million small employers that have not been able to offer an HRA since the enactment of the Affordable Care Act!

This provision overturns Department of Labor and IRS guidance that currently prevents some employers from funding employee HRAs because these arrangements were found to violate the Affordable Care Act insurance market reforms. The agency guidance would still prohibit these arrangements for larger employers.

In order for an employer to qualify for this new HRA allowance, they must have less than 50 full time employees, do not offer a group health plan and must provide the HRA on the same terms to all eligible employees. The maximum reimbursement small employers can provide under the plan is $4,950 for individuals and $10,000 for families, and the provision is effective for plan years beginning after December 31, 2016. The coverage and payments under a qualified HRA are excluded from gross income, unless the employee does not have minimum essential coverage for the month in which the medical care was provided.


Peak1 is ready to support this change. Because the Peak1 platform is a single system end-to-end, we can easily configure it to handle any card payment rules and apply them to an HRA without having to rely on or coordinate with third party technologies.  Please email sales(at) or call 208-758-0326 to learn more and request a quote!


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