The House-passed budget reconciliation bill includes a new two-year credit for employers that enroll their workers in a new health care program, CHOICE arrangements. The credit would be equal to $100 multiplied by the number of months for which each employee is enrolled in a CHOICE program in the first year, and $50 by the number of months each employee is enrolled in the program in the second year.
CHOICE arrangements (Custom Health Option and Individual Care Expense) are a type of health reimbursement arrangement (HRA) that allows applicable large employers (ALEs) to offer employees tax-free funding for individual health insurance premiums and qualified medical expenses. The coverage chosen by the employee must provide minimum essential benefits, as defined by the Affordable Care Act (ACA), although the health insurance purchased need not come from an ACA exchange. The CHOICE program is built on current law’s ICHRAs (Individual Choice Health Reimbursement Arrangements).
Prospects: Prospects for the Senate’s acceptance of the two-year CHOICE program tax credit are good. To date, there have been no objections from GOP Senators to this House bill provision. However, revenue considerations (the CHOICE tax credit will be competing with scores of other revenue-losing new tax breaks for limited resources allocable to new tax breaks) could present hurdles as the Senate gets closer to putting together its tax package.
NAIFA Staff Contact: Jayne Fitzgerald – Director – Government Relations, at jfitzgerald@naifa.org