Barletta Backs Health Care Relief for Small Business Employees

Jun 21, 2016
Press Release
Restores Ability of Employers to Provide Health Care Reimbursements

WASHINGTON – Congressman Lou Barletta (PA-11) today backed the passage of legislation he co-sponsored that will restore the ability of small businesses to reimburse their employees for the costs of health insurance premiums or other medical expenses.  This financial assistance, previously provided under Health Reimbursement Agreements (HRAs), was prohibited by the Affordable Care Act, otherwise known as Obamacare.  The Small Business Healthcare Relief Act, H.R. 5447, co-sponsored by Barletta, passed the House of Representatives by voice vote.  It now heads to the Senate for its consideration.

“For decades, small businesses in Pennsylvania and across America had been providing reimbursements to their employees to offset the costs of health insurance and other medical expenses, but Obamacare did away with all that,” Barletta said.  “I have met with many employers from my district who asked that we restore their ability to actually be able to help their employees pay for health care again, and tailor their plans to their own families’ needs.”

Under the authority of Obamacare, the Internal Revenue Service (IRS) issued guidance in 2013 that outlawed HRAs because they were inconsistent with the requirements of group health care plans.  Employers who continued to provide the benefit were subject to fines of $100 per day per employee, or as much as $36,500 per worker over the course of a year.  This legislation overturns that guidance and allows businesses with fewer than 50 employees to once again provide HRAs, using pre-tax dollars for the purchase of health insurance plans – on or off the exchange – or other medical expenses.   

“Here’s another case where the flimsy Obama promise of ‘if you like your plan, you can keep your plan’ turned out to be a falsehood,” Barletta said.  “Employers and employees were perfectly happy getting their health insurance with these reimbursements, so now we have to go in and clean up another mess made by Obamacare.”

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