One Big Beautiful Bill Act: Small Business Tax Credits & Implications

Description

Join Gary Daniels, Chief Growth Officer and Bruce Johnson, Head of Policy of Thatch, a new affiliate member and fintech company specializing in Individual Coverage Health Reimbursement Arrangements (ICHRA). Thatch has been proactively providing updates on healthcare policy, specifically regarding ICHRA and its implications for Illiinois businesses. The House of Representatives passed H.R. 1 with a narrow 215-214 vote. This bill encompasses the ICHRA enhancements including: Employer Tax Credits: Small businesses (with under 50 full-time employees) offering ICHRAs, which the bill renames "CHOICE Arrangements," would be eligible for new federal tax credits. These credits would amount to up to $1,200 per enrolled employee in the first year and $600 per enrolled employee in the second year of offering a CHOICE Arrangement. Tax Advantages for Exchange Coverage: The proposal would extend the ability for employees using CHOICE Arrangements under a cafeteria plan to pay their remaining premium balance on a pre-tax basis, regardless of whether the plan was purchased on or off a health insurance Exchange. Current ICHRA regulations limit this favorable tax treatment to plans purchased outside of an Exchange.  ICHRAs also offer an interesting option for very small businesses -- like Chambers of Commerce - to offer health insurance benefits to their employees.