What employers should know about the new HRA proposal
If approved, expanded rules could create new option for employers
Last fall, the Trump administration released proposed changes to Health Reimbursement Arrangement regulations that could expand HRAs as an option for more small and mid-sized employers.
If approved, the new regulations would allow employers of any size to reimburse employees for individual health insurance premiums. Currently, most employers can only reimburse for out-of-pocket medical expenses through an HRA.
Here are three things to know about the new regulations.
The new regulations would apply to employers of any size
Currently, only employers with fewer than 50 full-time employees can reimburse employees for individual health insurance premiums. If the new regulations are passed, groups of any size could do so.
The proposal would create two new types of HRAs
An ‘individual market premium reimbursement’ HRA would allow employers to reimburse for individual premiums, but only for employees not offered coverage through a group plan.
An ‘excepted benefit’ HRA would allow employers to contribute up to $1,800 for the reimbursement of out-of-pocket medical expenses and vision, dental or similar coverage, but only if the employees are offered a group plan.
HRAs would satisfy the employer mandate
Employers who choose to fund HRAs to reimburse employees for individual premiums would be considered compliant with the Affordable Care Act’s employer mandate, which currently requires all employees with more than 50 full-time or full-time equivalent employees to provide health coverage.
If approved, the new regulations would become effective January 1, 2020.