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October 03, 2019

Recent Individual Coverage Health Reimbursement Account Guidance Released

On September 27,  the CMS released a downloadable tool to help employers decide whether to offer individual coverage health reimbursement accounts (HRA). This tool will give employers access to health insurance premium data by geographic location. The tool will help identify the least expensive plan in a certain category based on an eligible employee’s age and geography. Employers can use this tool in deciding the funding level for an individual coverage HRA. In particular, large employers, who are subject to the ACA’s employer mandate requirements, can use this tool to determine whether their offer of coverage through an individual coverage HRA would be considered affordable based on standards established by the new HRA rules. Employers will be able to offer their employees individual coverage HRA’s starting January 1, 2020.

On September 30, the IRS published proposed regulations to clarify the application of the employer shared responsibility provisions and certain nondiscrimination rules under the Internal Revenue Code to HRAs and other account-based group health plans integrated with individual health insurance coverage or Medicare. The proposed regulations also provide certain safe harbors with respect to the application of those provisions to individual coverage HRAs. The public comment deadline on the proposed regulations is December 30, 2019.