In case you missed the good news, President Obama signed the 21st Century Cures Act into law on Tuesday, December 13. The new law includes an important provision that makes it simpler for employers to give money to their employees to purchase individual health insurance on a pre-tax basis.
This is a huge step in the right direction for employers nationwide who have been struggling to offer competitive employee benefits at a cost they can afford. Gravie CEO and co-founder, Abir Sen had this to say about the new law: “Employers across the country are embracing the defined contribution model of health benefits. They will now be able to give money to their employees without having to worry about tax consequences, putting the defined contribution model on more of an equal footing with traditional group insurance. For small businesses struggling to manage their healthcare costs, this law will be a huge boon.”
Since its founding in November 2013, Gravie has been a leader in the defined contribution model of employee health benefits. To highlight the importance fo this new law, Forbes published an article shortly after it was signed: New Law Eases Small Business Health Care Burden (But May Make Repealing ObamaCare Harder) quoting Sen’s thoughts on the new law and what it means for small to mid-sized companies:
“The new law is certain to encourage small and mid-sized companies that now offer group plans to replace those plans with reimbursed individual coverage, says Abir Sen, C.E.O. and founder of Gravie, which helps businesses do exactly that. “I think the macro trend for small and mid-sized companies is to say, a) we can’t afford traditional group insurance for much longer, and b) we don’t like the administrative complexities of administering my group plan when I’m a company of 20 people,” he says.
Since 2000, the share of firms with fewer than 200 workers that offer health insurance has fallen from 68 percent to 55 percent, according to the Kaiser Family Foundation. “If you talk to small business owners and C.E.O.s, they’re looking for something different,” says Sen. “But there are hurdles along the way, and tax, which was a big one, just got taken out.”
(Read the full article here.)