HRA Final Regulations Published in Federal Register

On June 14, 2019, the U.S. Departments of Health and Human Services, Treasury, and Labor jointly issued final regulations entitled Health Reimbursement Arrangements and Other Account-Based Group Health Plans, as well as several accompanying items of guidance and general information. The final regulations are published in today’s Federal Register and will become effective August 19, 2019 (60 days from publication). The announced applicability date is for plan years beginning on or after January 1, 2020.

A health reimbursement arrangement (HRA) is an employer-funded account to be used for paying unreimbursed medical expenses, with variations that include both a pre-retirement and post-retirement HRA. The account generally 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.

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 health insurance.

Watch for any further information about this extensive guidance.