Health & Welfare Plans Newsletter

BULLETIN
June 13, 2019

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[Official Guidance]

Text of Final Regs: Health Reimbursement Arrangements and Other Account-Based Group Health Plans

497 pages. "The final rules allow integrating HRAs and other account-based group health plans with individual health insurance coverage or Medicare, if certain conditions are satisfied (an individual coverage HRA). The final rules also set forth conditions under which certain HRAs and other account-based group health plans will be recognized as limited excepted benefits. Also, the Department of the Treasury and the [IRS] are finalizing rules regarding premium tax credit (PTC) eligibility for individuals offered an individual coverage HRA. In addition, the [DOL] is finalizing a clarification to provide assurance that the individual health insurance coverage for which premiums are reimbursed by an individual coverage HRA or a qualified small employer health reimbursement arrangement (QSEHRA) does not become part of an ERISA plan, provided certain safe harbor conditions are satisfied. Finally, [HHS] is finalizing provisions to provide a special enrollment period (SEP) in the individual market for individuals who newly gain access to an individual coverage HRA or who are newly provided a QSEHRA."
Employee Benefits Security Administration [EBSA], U.S. Department of Labor [DOL]; Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS]; and Internal Revenue Service [IRS]

[Official Guidance]

Text of Agency FAQs: Individual Coverage and Excepted Benefit Health Reimbursement Arrangements (PDF)

18 pages. "[1] What are the benefits of offering an Individual Coverage HRA to employees? ... [2] How does an Individual Coverage HRA work?... [3] Why is the HRA rule important for small businesses and their workers?... [4] What are the expectations for take-up of the Individual Coverage HRA?... [5] I am an employer. To whom can I offer an Individual Coverage HRA? ... [6] How do my employer contributions work? ... [7] Can an employer offer an Individual Coverage HRA to satisfy the employer mandate?... [8] What other responsibilities do I, the employer, have? ... [9] May an employer allow employees to pay any portion of the premium for their individual health insurance that is not covered by the Individual Coverage HRA on a tax-preferred basis by using a salary reduction arrangement under a cafeteria plan? ... [10] Can large employers offer Individual Coverage HRAs too?... [11] What are the benefits of offering an Excepted Benefit... [12] When can employers start offering Individual Coverage HRAs and Excepted Benefit HRAs?"
Employee Benefits Security Administration [EBSA], U.S. Department of Labor [DOL]; Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS]; and Internal Revenue Service [IRS]

[Official Guidance]

Text of Individual Coverage HRA Model Notice, with Instructions (PDF)

"An individual coverage HRA must provide a written notice to all employees (including former employees) who are eligible for the individual coverage HRA. The final regulations explain the requirements for the notice. Individual coverage HRAs may use this model notice to satisfy the notice requirement."
Employee Benefits Security Administration [EBSA], U.S. Department of Labor [DOL]; Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS]; and Internal Revenue Service [IRS]

[Official Guidance]

Text of Individual Coverage HRA Model Attestations (PDF)

"[I]ndividual coverage HRAs must implement, and comply with, reasonable procedures to satisfy two substantiation requirements: ... [1] The HRA must substantiate that participants and each dependent covered by the HRA are, or will be, enrolled in individual health insurance coverage or Medicare Part A and B or Medicare Part C for the plan year (or for the portion of the plan year the individual is covered by the HRA, if applicable).... [2] The HRA may not reimburse a medical care expense unless, prior to the reimbursement, the participant substantiates that the individual on whose behalf the reimbursement is requested is (or was) enrolled in individual health insurance coverage or Medicare Part A and B or Medicare Part C for the month during which the medical care expense was incurred.... The Departments have developed the attached model attestations for HRAs that choose to use attestation to satisfy either the annual coverage substantiation requirement or the ongoing substantiation requirement."
Employee Benefits Security Administration [EBSA], U.S. Department of Labor [DOL]; Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS]; and Internal Revenue Service [IRS]

[Guidance Overview]

HHS, DOL and Treasury Expand Access to Quality, Affordable Health Coverage Through Health Reimbursement Arrangements

"[It] is estimated this expansion of HRAs will benefit approximately 800,000 employers, including small businesses, and more than 11 million employees and family members, including an estimated 800,000 Americans who were previously uninsured.... Under the rule, starting in January 2020, employers will be able to use what are referred to as individual coverage HRAs to provide their workers with tax-preferred funds to pay for the cost of health insurance coverage that workers purchase in the individual market, subject to certain conditions. These conditions strike the right balance between employer flexibility and guardrails meant to protect the individual market against adverse selection, and include a notice requirement to ensure employees understand the benefit. Individual coverage HRAs are designed to give working Americans and their families greater control over their healthcare by providing an additional way for employers to finance health insurance."
Employee Benefits Security Administration [EBSA], U.S. Department of Labor [DOL]; Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS]; and Internal Revenue Service [IRS]

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Lois Baker, J.D., President  loisbaker@benefitslink.com
David Rhett Baker, J.D., Editor and Publisher  davebaker@benefitslink.com
Holly Horton, Business Manager  hollyhorton@benefitslink.com

BenefitsLink Health & Welfare Plans Newsletter, ISSN no. 1536-9595. Copyright 2019 BenefitsLink.com, Inc. All materials contained in this newsletter are protected by United States copyright law and may not be reproduced, distributed, transmitted, displayed, published or broadcast without the prior written permission of BenefitsLink.com, Inc., or in the case of third party materials, the owner of those materials. You may not alter or remove any trademark, copyright or other notices from copies of the content.

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