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Proposed Regulations Would Again Allow Stand-Alone HRAs


Proposed Regulations Would Again Allow Stand-Alone HRAs

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On October 23, the Department of Labor (DOL), Treasury Department and Department of Health and Human Services (HHS) released proposed regulations which will expand the use of health reimbursement arrangements (HRAs) by employers. If approved as written, the regulations would take effect for plan years beginning on and after January 1, 2020.

Under current Affordable Care Act regulations, an HRA not directly linked to a group health plan -- that is, one to be used for the purchase of individual insurance coverage -- violates the rule that prohibits plans and issuers from imposing lifetime or annual limits on the dollar value of essential health benefits. These "stand-alone" HRAs were no longer allowed beginning in 2014.

The proposed regulations would allow employers to once again use HRAs to reimburse employees for the cost of individual health insurance coverage. Certain conditions would apply to "mitigate the risk that health-based discrimination could increase adverse selection in the individual market," according to a DOL news release.

Additionally, the proposal would enable employers to offer an excepted benefit HRA of up to $1,800 per year (indexed annually for inflation) for certain qualified medical expenses, provided that employees are offered coverage under another group health plan sponsored by the employer.

The Departments are requesting comments on the proposed regulations to be submitted by December 28, 2018. MedBen clients with questions regarding current or proposed HRA compliance rules are welcome to contact Director of Administrative Services Sharon A. Mills at

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