I've been looking at helping a physician group install a plan. An HRA will be used and we evaluated two high-deductible options: 1) a guarantee issue high deductible group plan and 2) a series of individually issued underwritten plans.

As you would expect, the underwritten plans offer far lower premiums and work well provided everyone is "sufficiently healthy". My question concerns HIPAA and my understanding that it precludes an employer from using individually underwritten plans. Or more precisely that the use of these plans do not receive the same tax benefits as the group plans.

Is this true? And if so, how about where the premiums are paid through a Section 105 employer-sponsored HRA?

Thank you in advance.

tl