MERP for spread between HSA and MOOP

[Flyboyjohn]

Employer offers HDHP with maximum family deductible and out-of-pocket of $13,100.

Employer funds maximum HSA for family coverage of $6,750.

Can employer also offer a Medical Expense Reimbursement Plan for the spread?

Thanks.

[Flyboyjohn]

Found the answer to my question: Yes, employer can use an HRA to reimburse the spread

[My 2 cents]

19 minutes ago, Flyboyjohn said:

Found the answer to my question: Yes, employer can use an HRA to reimburse the spread

Knowing nothing about the applicable rules, while I am glad that you found your answer, I am curious about what MOOP might be.  What a silly-sounding acronym!

[david rigby]

26 minutes ago, Flyboyjohn said:

Found the answer to my question: Yes, employer can use an HRA to reimburse the spread

Perhaps you can help by describing where you found the answer, for the benefit of others.

[Flyboyjohn]

MOOP is shorthand for Maximum Out of Pocket.

Answer was in IRS Publication 969 under the section dealing with what other health plans are permissible in conjunction with an HSA (referred to by IRS as "Post-deductible health FSA or HRA").

[Bill Presson]

I clicked just to see if the answer was actually MOOR and not MOOP.

[acm_acm]

On ‎10‎/‎11‎/‎2017 at 5:18 PM, My 2 cents said:

Knowing nothing about the applicable rules, while I am glad that you found your answer, I am curious about what MOOP might be.  What a silly-sounding acronym!

The Moops invaded Spain and were driven out by Ferdinand and Isabella. ;-)

[XTitan]

I thought MOOP was just a more polite way to say bullsh*t

[Belgarath]

I got an image of strange looking (but identical in appearance) Dr. Seuss creatures playing in a field, MOOPS and MOPES. "It's pretty hard telling the MOOPS from the MOPES, but the MOOPS play with hoops and the MOPES play with ropes." Or something equally ridiculous. I think I need therapy...

[jpod]

That answer (from Pub. 969) surprises me, because it seems to be inconsistent with the policy behind HDHPs and HSAs.  Assuming that is the correct answer, I find it hard to believe that the employer's cost in funding the HSAs and the "MOOPs" would be less than the cost of health insurance with no or a very low deductible.  

[spiritrider]

First, a small correction for the OP. The employer can actually offer a plan that covers the spread between the minimum allowed deductible and the max OOP, not just between the HSA maximum contribution limit and the max OOP. This is a common plan and referred to as a post-deductible HRA and is similar to the concept of a post-deductible FSA.

To answer jpod's post:  This is not at all inconsistent with HDHP/HSA code/regulations. "Other coverage" is only disqualifying if it pays/reimburses before the minimum allowed HDHP deductible. These are 2017 = $1300 Individual/$2600 Family and 2018 = $1350 Individual/2700 family.

Finally, while totally self-insured plans are usually only the province of very large employers, an HDHP/HSA/(post-deductible and/or limited HRA) can be very cost effective for the employer and beneficial for the employees. Self-insuring a higher deductible above the minimums and the maximum OOP will cost far less than having an insurance company do so. After all, the insurance company is making a profit. Many medium -> large sized businesses can benefit from such constructs.