WASHINGTON – Sen. Chuck Grassley and Sen. Heidi Heitkamp today introduced an updated version of their bipartisan legislation allowing small businesses to resume helping their employees buy individual health insurance.  Grassley and Heitkamp introduced the same version of the Small Business Health Care Relief Act approved today by the House of Representatives Ways and Means Committee on voice vote to ease the chances of Senate passage.  

“This legislation should be a no-brainer for anyone who supports small business,” Grassley said.  “I hope that with today’s action in the Ways and Means Committee, it’s only a matter of time before this legislation becomes law.  I urge all my colleagues to work with Senator Heitkamp and me to see to it that this becomes a reality.” 

“Our bipartisan bill would restore small employers’ abilities to help their employees purchase health coverage using HRAs,” Heitkamp said.  “It’s a simple idea that just makes sense, and I hope more members join us as we work in the Senate and with the House to pass this needed bill which today has gained critical momentum.”

The new version of the bill makes improvements to ensure the bill will work as intended.  Further, in order to address any cost concerns, the bill imposes a still-generous limit on the amount an employer may provide to their employee to purchase individual insurance or pay for other medical expenses.  This limit is set at $5,130 for individuals $10,260 for a family and is indexed for inflation going forward.

The IRS has interpreted the Affordable Care Act as barring small businesses from reimbursing their employees for the cost of buying health insurance on the individual market.  This has disrupted a practice that small business owners and their employees used for years, leading to expressions of concern from small business owners and employees to Congress. 

Grassley and Heitkamp have been working to fix this problem for much of the current session of Congress and will continue to do so.   

The text of the updated bill, S. 3060, is available here.  A technical explanation from the non-partisan Joint Committee on Taxation is available here. The text of Grassley’s statement on the introduction is available here. 

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