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Healthcare Reform

The Federal Patient Protection and Affordable Care Act (PPACA), more commonly known as Health Care Reform, implements sweeping changes that affect individual and employer-sponsored health plans. To receive a free individual family quote now, click here. To see family plans offered through the exchange, please call us at (209) 529-4530.

Background on Small Business Health Care Tax Credit

The Small Business Health Care Tax Credit was included in the Affordable Care Act. Small employers that pay at least half of the premiums for employee health insurance coverage under a qualifying arrangement may be eligible for the small business health care tax credit. The credit is specifically targeted to help small businesses and tax-exempt organizations that primarily employ 25 or fewer workers with average income of $50,000 or less.

For More Information

Additional information about eligibility requirements and calculating the credit can be found on the Small Business Health Care Tax Credit for Small Employers page of The IRS has also posted an updated video relating to the Small Business Health Care Tax Credit, which is available by clicking here. To read more on the Affordable Care Act, visit the Health Care Reform section.


The Affordable Care Act generally prohibits group health plans from imposing lifetime or annual limits on the dollar value of health benefits, but allows "restricted annual limits" with respect to essential health benefits for plan years beginning before January 1, 2014. Restricted annual limits may be waived if compliance with the rules would result in a significant decrease in access to benefits or a significant increase in premiums.

Exemption for Stand-Alone HRAs

An HRA is a self-insured medical reimbursement plan funded solely by employer contributions and not through salary reduction that:

  • Reimburses some or all of the medical care expenses of participating employees, spouses and dependents up to a maximum dollar amount for a coverage period; and
  • Allows participants to carry forward unused amounts remaining at the end of the coverage period for use in subsequent coverage periods.

According to the guidance, all HRAs set limits on the amount that can be spent and those limits would always be less than the applicable restricted annual limit amounts, so applying the annual limit restrictions would result in a significant decrease in access to HRA benefits.

As a result, the guidance exempts all stand-alone HRAs that were in effect prior to Sept. 23, 2010 from having to apply individually for an annual limit waiver for plan years beginning on or after Sept. 23, 2010 but before Jan. 1, 2014. Note that an HRA that is integrated with other health coverage that complies with the annual limit requirements (or obtains a waiver) would not need to apply for a separate waiver.

Record and Notice Requirements Still Apply

An HRA that is exempt from applying for an annual limit waiver still must comply with the record retention and annual notice requirements to participants and subscribers set forth in previous guidance.

Additional Information

To read the guidance in its entirety, please click here. For more on HRAs, visit the section on HSAs, FSAs & Other Tax-Favored Plans.

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