Kathy benefits

For a small employer (under 20), the Medicare Secondary Payer rules do not prohibit paying/reimbursing employees' Medicare premiums. It sounds like your small governmental employer may be asking about an HRA, but what they really want is a special type of HRA called a "Medicare Premium Reimbursement Arrangement." It's allowable under IRS Notice 2015-17. Here's brief info on the conditions: The employer offers a group health plan providing minimum value (e.g., major medical); Employees participating in the Program are actually enrolled in Medicare Parts A and B; The Program is available only to employees enrolled in Medicare Parts A and B and/or D; and The Program is limited to reimbursement of Medicare Parts B and D premiums, and “excepted benefits” (e.g., Medigap policy premiums).

I suggest you consider amending plan to provide a minimum run-out period of 90 days. The DOL claim regs do not require any specific number of days for accepting eligible claims, but do require reasonableness. A 45-day limit, IMO, does not meet the standard for reasonableness. The industry norm is 90 days, and allows reasonable time for claimant to receive bills (e.g., itemized receipts), file with primary plan, get EOB from primary plan showing remaining out-of-pocket expenses, and then file with FSA -- which is a very common scenario. Meanwhile the claim in question can be adjudicated past the 45-day limit. Presumably the plan already includes standard language such as "x days, or longer if events beyond the participant's control prevented the participant from meeting this timeframe."