On Tuesday, the Internal Revenue Service (IRS), the Department of Labor Department (DOL), and the Department of Health and Human Services (HHS) issued proposed regulations that reverse earlier regulations limiting the use of Health Reimbursement Arrangements (HRA) to individuals covered by a group health plan.
Current regulations effectively prohibit employers from using HRAs to reimburse employees for the cost of individual health insurance coverage. In a change from the current scheme, the newly proposed regulations would allow integrating HRAs with individual health insurance coverage and permit HRAs to reimburse employees for the cost of individual health insurance coverage, subject to particular requirements.
Additionally, employers that offer a traditional group health plans could provide a HIPAA-excepted HRA of up to $1,800 per year to reimburse employees for certain qualified medical expenses. These HIPAA-excepted HRAs would not be subject to Patient Protection and Affordable Care Act (ACA) mandates. These changes are proposed to apply for plan years beginning January 1, 2020.
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As always, American Fidelity is committed to providing our customers with up-to-date information on employee health and welfare benefits compliance. For more information about this and other regulatory developments, visit our website at HCReducation.com.