New HRA Rules for 2017

Under the Affordable Care Act, it was determined that employers were no longer allowed to use a Medical Expense Reimbursement Plan (MERP) to provide health benefits to their staff. Prior to this law, many small employers used this type of plan as an alternative to offering staff health insurance coverage.

Under the new law that was passed by Congress a few months ago, employers can again use a reimbursement plan known as a Qualified Small Employer Health Reimbursement Arrangement (QSEHRA). Employers can make tax-deductible contributions to the HRA, and the benefits are tax-free to employees. The funds may be used to pay for qualifying medical expenses for the employee and their family members, and can also be used to reimburse for health insurance premiums.

To be eligible for a QSEHRA, the employer must have less than 50 full-time equivalent employees and cannot offer group health insurance coverage to any. The HRA must be offered to all full-time, non-seasonal employees who have been employed for at least 90 days and are over the age of 25.

The new HRA rules were put into effect on January 1, 2017.

If you have any questions about the new HRA rules, please contact Rebecca Bischoff, CPA at 314.576.1350 or

Rebecca Bischoff, CPA is a supervisor with BWTP P.C.

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