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Stand-alone HRAs No Longer Allowed In 2014

04/25/13

  05:03:28 pm, by MedBen5   , 301 words,  
Categories: News, Health Plan Management

Stand-alone HRAs No Longer Allowed In 2014

Effective January 1, 2014, “stand-alone” health reimbursement arrangements (HRAs) can no longer stand alone.

In a Frequently Asked Questions released earlier this year regarding the implementation of the Affordable Care Act, the Departments of Labor, Health and Human Services, and the Treasury (collectively, the Departments) state that an HRA not directly linked to a group health plan violates the rule that prohibits plans and issuers from imposing lifetime or annual limits on the dollar value of essential health benefits.

Put another way, if your group provides a stand-alone HRA to be used for the purchase of insurance coverage on the individual market, it would not be considered integrated with that coverage under the Affordable Care Act (ACA) and would, therefore, be in violation of the law. This rule also applies to stand-alone HRAs created solely for the payment of medical expenses or other qualified uses when not integrated with a group health plan.

Conversely, an HRA integrated with other coverage as part of a group health plan – that is to say, not a stand-alone – still complies with the law regardless of contribution limits, provided that the coverage on its own satisfies the requirements. However, the FAQ cautions that an HRA is not considered integrated with the group health plan unless the HRA is available only to employees who are covered under that plan.

MedBen has reviewed plan designs for its clients with HRAs as well as member participation in the plan to ensure that they conform to ACA requirements, and continues to monitor regulatory updates. Should it be necessary to make any changes to your health care plan relative to HRAs, we will contact your group.

MedBen clients who have questions regarding the HRA compliance rules or need assistance may contact Director of Administrative Services Sharon A. Mills at smills@medben.com.

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