On March 29, 2011, the State of Indiana passed HB 1486 which modifies the states small
group health insurance law and removes confusion associated with tax free reimbursements of individual health plans. This Bill further encourages small employers to use Health Reimbursement Arrangements (HRAs) to fund tax-free employee health benefits.
The Enacted Bill makes the following changes effective July 1st, 2011:
SECTION 32. IC 27-8-15-1 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2011]: Sec. 1. This chapter applies to any individual or group health insurance plan that is issued for delivery in Indiana to at least three (3) two (2) employees of a small employer located in Indiana if one (1) of the following conditions is met:
SOURCE: IC 27-8-15-8.5; (11)HE1486.1.33. -->
Effectively, this bill gives small employers more leeway in setting up an HRA to reimburse individual premiums, and allows individual policies to be sold at the workplace by insurance brokers.
Small employers should continue to use an IRS, HIPAA, and ERISA-compliant platform to offer defined contribution health plans and HRAs that reimburse for premiums.
What do you think about this change? Is this good or bad for Indiana small employers?