The U.S. Departments’ of Health and Human Services, Treasury, and Labor have jointly issued final regulations, entitled Health Reimbursements and Other Account-Based Group Health Plans, as well as several accompanying items of guidance and general information. These other items include a news release, frequently-asked-questions (FAQ), model notice, and model attestation.
Health reimbursement arrangements (HRAs) are employer-funded accounts to be used unreimbursed medical expenses, with variations that include both pre-retirement and post-retirement HRAs. In general, these accounts cannot be used to pay most health insurance premiums.
The final regulations identify new employer-funded HRA variations. The Individual Coverage HRA would allow a member of a group of employees that is not offered a group health plan to use this HRA’s funds to purchase health insurance coverage in the individual market, including public exchanges under the Affordable Care Act (ACA).
The Excepted Benefit HRA would allow employees to use a limited amount each year from this HRA to cover certain specified expenses—including premiums for vision, dental, and what is known as short-term/limited duration insurance coverage.