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Integrated HRA Question


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Leaving aside nondiscrimination testing issues, can an employer provide its CEO (and only its CEO) with a medical expense reimbursement plan that reimburses deductibles, copays, etc. under the employer's self-insured health plan? That is, will the reimbursement plan be "integrated" with the employer's health plan such that it is not subject to the ACA's restriction on annual limits even though only one individual can receive the benefit?

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I thought that that was what "integrated" meant.

George D. Burns

Cost Reduction Strategies

Burns and Associates, Inc

www.costreductionstrategies.com(under construction)

www.employeebenefitsstrategies.com(under construction)

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Leaving aside nondiscrimination testing issues, can an employer provide its CEO (and only its CEO) with a medical expense reimbursement plan that reimburses deductibles, copays, etc. under the employer's self-insured health plan? That is, will the reimbursement plan be "integrated" with the employer's health plan such that it is not subject to the ACA's restriction on annual limits even though only one individual can receive the benefit?

To begin with, I am not an expert or attorney, so keep this in mind. But yes, you can set-up a HRA as you described in the first sentence. You may pay fines but you could do it. Keep in mind, the 105 fines for a self-funded HRA is a dollar amount on the HCI only.

I don't know if I understand your second question/concern about it being an integrated HRA. Integrated is an HRA that is attached to a high deductible medical plan.

Don't know if I was of all that much help. Good luck.

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  • 4 weeks later...

Exec-U-Care used to offer this benefit all the time. Now they are not issuing new plans but allowing existing grandfathered plans to continue.

However, there is another carrier, RSL Advantage, that is issuing new plans. They are both marketed as being fully insured.

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I am really looking for thoughts as to whether this scenario is doable from a legal perspective.

I presume Exec-U-Care is not accepting new business because its (dubious) business model has been eviscerated by the ACA(?)

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  • 2 weeks later...

A Health Reimbursement Arrangement (HRA) is the best way to reimburse deductibles, co-pays, and eligible medical expenses while insured under an individual health insurance plan.

As for legally providing only the CEO of a company with benefits, a HRA allows employers to set up different classes of employees based on bona-fide job criteria to which you can provide different benefits.

"To comply with IRS and ERISA regulations, employee classes within the HRA must:

  • Be based on bona-fide business differences. These may include job categories, geographic location, part-time or full-time status, date of hire, etc.

  • Treat all “similarly situated” employees equally. By creating classes based on genuine job categories, all employees within a class will be “similarly situated”.

  • Not discriminate against unhealthy people. An employer cannot provide inferior benefits to specific individuals with adverse health conditions. (However, the law does permit employers to provide superior benefits to individuals with adverse health conditions.)

  • Spell out the requirements for classes and benefits in the ERISA plan document." (source: HRA Employee Classifications)

So technically, you could set up a class based on the job criteria of a CEO and provide benefits to that one class.

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