Small Business, Health Advocacy Groups Urge House Panel to End Insurance Fines That Fall on Employers

Dozens of employer groups and health care advocacy organizations are urging the leaders of the Ways and Means Committee to advance a bill they say would make it easier for small business owners to cover health care costs for employees.

The groups write in a letter that the committee should mark up the Small Business Healthcare Relief Act, which they say would allow small businesses with fewer than 50 employees to offer employer payment plans and health reimbursement agreements to employees to cover premiums or qualified medical expenses associated with insurance without facing fines. The committee will hold a hearing on how the tax code affects the country’s health care system Thursday, which could a potential venue to discuss the bill, said Sandra Ramos, a spokeswoman for the Council for Affordable Health Coverage, which signed the letter.

“To provide much-needed relief, we support allowing employers to provide employees with a defined financial contribution toward the cost of health care coverage,” they write. “Under this approach, employers could provide employees with a set dollar amount to use on a tax-preferred basis when purchasing health care coverage.”

The bill would end IRS penalties on small business that offer tax-free HRAs to employees, which can result in thousands of dollars in fines for the companies.

Groups among the signatories include the Chamber of Commerce, the Healthcare Leadership Council and the Small Business Council of America.

“Understandably, the movement for nixing this nonsensical fine has tremendous momentum,” CAHC President Joel White said in a statement. “Not only does the bill have bipartisan, bicameral support, but more than 60 national and multi-state organizations are on board.”

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