Cures Act Restores Stand-Alone HRA Plans for Small Employers

The Act provides flexibility for small employers who are not required under the ACA to provide health insurance, but still want to provide employees some type of health benefits without suffering a tax penalty. The regulation requires the HRA to be funded solely by the employer.  Employees may be excluded from coverage under certain conditions.  Employers utilizing this HRA option must also provide all eligible employees with notice containing specific information about the benefit at least 90 days prior to the start of the plan year or prior to when the employee becomes eligible.

The Act also grants transition relief for small employers who offer reimbursement of individual health insurance premiums.  Though the IRS indicated such payment plans were not allowed under the ACA, the IRS granted temporary relief for such employer payment plans beginning in 2016.

Finally, in addition to the HRA provision, the Act was intended to speed up medical research and drug and device approvals, and also makes small changes to the Mental Health Parity and Addiction Equity Act (“MHPAEA”) and the Health Insurance Portability and Accountability Act (“HIPAA”).  These changes are meant to ensure that mental health and substance abuse disorders are treated fairly by insurance companies.

Action Items

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Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser.

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