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I'm confused by the recently proposed excepted benefit HRA that would allow an HRA to reimburse dental/vision premiums and other ACA exempt benefits if eligible employees are also offered group health plan coverage. https://www.federalregister.gov/documents/2018/10/29/2018-23183/health-reimbursement-arrangements-and-other-account-based-group-health-plans I thought current rules already allow for a limited scope HRA that reimburses dental/vision expenses only (including premiums) as long as they are not an "integral part of a group health plan" or they are provided "under a separate policy, certificate, or contract of insurance" (such as an individual dental/vision policy)? What am I missing? Treas. Reg. §54.9831-1(c)(3)(i); DOL Reg. §2590.732(c)(3)(i). (special rules relating to group health plans) See Amendments to Excepted Benefits, 26 CFR Part 54, 29 CFR Part 2590, 45 CFR Part 146, 79 Fed. Reg. 59130, 59132 (Oct. 1, 2014) Treas. Reg. §54.9831-1(c)(3)(ii) DOL Reg. §2590.732(c)(3)(ii) HHS Reg. §146.145(b)(3)(ii).

I think probably, yes. However, I have not seen specific guidance for or against allowing this. Nor have I had an employer/plan allow this. However, if I play this scenario out in my mind it seems illogical for an employee to enroll in a full health FSA and then roll $500 from limited purpose FSA in a prior plan year into a limited purpose FSA in a new plan year and have both a new full health FSA account and limited purpose FSA account in the same plan year. It also seems like a messy situation from an administration perspective that could lead to mistakes and confusion. Though the fact that it's illogical and messy does not make it allowable by the IRS, but it does present a good business reason to allow it from a participant and plan administration perspective. In the absence of guidance from the IRS and the fact that we do have guidance that the opposite is allowable I suspect it's okay, but admittedly would want to dig further. If HSA enrollment in a new plan year is cause to allow rolling a full healthcare FSA balance from a prior plan year into a limited purpose FSA in the new plan year, I think losing HSA eligibility in the new plan year should allow rolling the limited purpose FSA balance from a prior year into a full Health FSA in the new plan year. Also, I've always advised that plans should not allow participants to enroll in both a full health and limited purpose FSA within the same plan year and this scenario effectively allows it.