FAQs address integrated HRAs

In FAQs about Affordable Care Act Implementation Part 37, the Departments of Labor, Health and Human Services, and the Treasury (the Departments) addressed the ability to integrate a health reimbursement arrangement (HRA) with a group medical plan sponsored by another employer.

Integrated HRAs. HRAs are employer-funded and may be provided tax-free to employees provided they meet certain requirements. HRAs will be in compliance with the annual dollar limit prohibition and the preventive services requirements of the Patient Protection and Affordable Care Act (ACA) if they are “integrated” with other compliant coverage as part of a group health plan. Note that this provision no longer applies to qualified small employer health reimbursement arrangements (QSEHRAs), as provided in the 21st Century Cures Act.

Family HRAs. The FAQs confirm that an HRA covering the medical expenses of employees and their spouses and dependents (a “family HRA”) may be integrated with a group medical plan sponsored by another employer (such as the spouse’s employer) if that group medical plan meets all of the applicable integration requirements. In addition, a family HRA also will qualify as an integrated HRA if the employee has self-only coverage under the employer’s group medical plan and the employee’s spouse and dependents have coverage under another employer’s group medical plan (assuming that group medical plans meet the applicable integration requirements).

In addition, for purposes of determining whether a family HRA is integrated with a group medical plan sponsored by another employer, the employer sponsoring the HRA may rely on the reasonable representation of an employee that the employee and/or his/her spouse and dependents are also covered by another employer’s group medical plan that meets the integration requirements.

SOURCE: FAQs about Affordable Care Act Implementation, Part 37, January 12, 2017.

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