Stand-Alone Medical Reimbursement / Employer Funded FSA

[401 Chaos]

Am I correct that IRS Notice 2013-54 basically prohibits continued sponsorship of a stand-alone medical reimbursement plan that is sponsored by a very small employer that does not offer any group medical coverage? In essence, the plan has simply provided for the reimbursement of qualified medical expenses up to a maximum of $2,000 per year. In essence, it is the equivalent of a health FSA that is funded solely by employer contributions and does not meet the preventive services mandates and obviously caps coverage for such items with the annual reimbursement amount, etc. Based on 2013-54, I'm not seeing any way that can be continued.

[Chaz]

Yes, 2013-54 generally puts the kibosh on standalone MERPs.

[Benefits 101]

You can combine the HRA with a "skinny plan" (aka "bare bones plan)... new kind of idea. For small employers, it should fly.

Edited to add:

Since the post pertained to small employers, How do you propose getting around the state small group/employer restrictions on use of section 106 and 162 etc or against reimbursement of premium by the employer and the insurance carriers guidelines, in the many states that have such restrictions?