21st Century CURES Act

Benefits Connection

- Cornerstone News

In late 2016, President Obama signed the 21st Century CURES Act into law. Previously employers had been prohibited from providing employees with funds to purchase individual health insurance policies.

The CURES Act enables small employers with fewer than 50 full-time employees Health Reimbursement Arrangements (HRAs). Employees may use the HRA to pay for qualified out-of-pocket medical expenses, including individual policies purchased through the public exchanges. The CURES Act creates an exemption from ACA group health plan requirements for qualified small employer health reimbursement arrangements (QSHERA).

General criteria for QSHERA include:

  •  Must be a small employer (fewer than 50 full-time employees or equivalents)

  •  Employer cannot also sponsor a group health plan

  •  QSHERAs must be offered to all full-time employees

- Except: Who are in their 90-day waiting period, individuals under 25, individuals covered under collective bar-gaining agreement for health benefits, along with part-time and seasonal workers.

  •  Must be provided on the same terms to all eligible employees

- Except: The CURES Act allows benefits to vary based on age and family-size market variations in the price of an insurance policy.

  •  Payments and reimbursements must be funded solely by the employer and cannot exceed $4,950 for an individual or $10,000 for a family.

  •  Notice — Employer must provide each eligible employee a written notice at least 90 days before the beginning of the year or when an employee becomes eligible, including:

- The amount of the permitted benefit under the Qualified HRA for the year;

- A statement that if the employee is applying for advance payment of the premium tax credit for health insurance on the Marketplace, the employee must inform the Market-place of the amount permitted under the Qualified HRA;

- A statement that if the employee is not covered under minimum essential coverage for any month, the employee may be subject to a tax under Code Section 5000A and reimbursements under the Qualified HRA may become taxable income.

The employer’s contribution, while not taxable income to the employee, must be reported on the employee’s W-2.

Employees may not be eligible for health insurance subsidies for plans purchased through the exchange during the months they are covered under an employer’s QSHERA.

For more information, please contact your SHERRILL MORGAN ac-count manager at 859-291-6600 or 800-291-4222.