Proposed Regulations Expand Use of HRAs to Promote Individual and Portable Health Coverage

On October 29, 2018, proposed regulations were issued that will benefit hundreds of thousands of businesses and millions of workers and their families in the coming years.  Below are just some of the provisions being proposed:

  • Health Reimbursement Arrangements (HRA) would be allowed to be integrated with, and to reimburse premiums for, individual health insurance coverage if certain conditions are met.
  • Employers could offer non-integrated HRAs that qualify as excepted benefits if they meet certain requirements.
  • Employers with HRAs that are integrated with individual health insurance could allow employees to use pre-tax cafeteria plan salary reductions to pay any portion of their individual insurance premiums not covered by the HRA.
  • Premium tax credit consequences for individuals who are offered or covered by an HRA that is integrated with individual health insurance.

The Department of Health and Human Services (HHS) also has an individual addition to the proposed rule. This would allow for a special enrollment period for employees and their dependents who gain access to an HRA that is integrated with individual health insurance coverage or are provided with a QSE HRA.

 “Today’s announcement is another example of President Trump delivering on his promise to provide for more affordable health care options for the American people.  More access to association health plans, short-term insurance, and flexible HRAs…,” said U.S. Secretary of Health and Human Services, Alex Azar. 

We can expect these proposed rules to be finalized in 2019 to allow for implementation on or after January 1, 2020. BASE® is keeping a close eye on how these new rules could further business owners opportunity for health care tax savings, efficiencies, and administrative ease.

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