Health coverage is a focus for small employers as they look for innovative and cost-effective ways to provide benefits. A Health Reimbursement Arrangement, or HRA, is timely and can offer substantial flexibility for small business.
Offering a small employer HRA to employees allows them to use account dollars to pay their individual healthcare premiums and to reimburse any out-of-pocket cost they or their dependents may incur. In 2018 you as an employer can contribute up to $5,050 for an individual and $10,250 for a family. For employees to be eligible, they must have completed 90 days of service, be full-time employees over the age of 25, and residents of the U.S. Participating employees must maintain minimum essential health coverage to realize the tax advantage of the HRA, or the funds could be included as taxable income during any lapse in coverage. HRA funding amounts are reported on W-2s, and a Form 1095B is required.
For more information, please contact JerriLynn Cobb at JerriLynn@dkyoung.com.