What is HRA’s – Health Reimbursement Accounts

• HRA’s – Health Reimbursement Accounts  allow an  employer to pay or  Self Fund say by using a Ben E Lect Program  and possibly save thousands of $$$, for his and the employees uninsured medical care  for the diagnosis, cure, mitigation, treatment, or prevention of disease, or for the purpose of affecting any structure or function of the body. and deduct them.  ^{TASC * (§IRC §213 (d), IRS Publication 502 Allowable Medical Expenses   Internal Revenue Code (IRC) §105   * Publication 969)} 
• There are also NEW  provisions to allow reimbursement for Individual Policies purchased by employees.

What is Section 105 MRP Medical Expense Reimbursement 

• Under ACA/Obamacare  only reimbursement of medical insurance premiums and qualified “preventative care” are allowed.    This puts a huge kibosh on the otherwise huge tax savings for small business entrepreneurs. … The co-pays, deductibles, and other non-covered medical is still allowed by the section 105 MRP plan. The bottom line is the math, and for some, the HSA’s Health Savings Accounts (HSA) may be a better route going forward. ^{Legal Wiz.com}
  • covered ca.com/hra
  • covered ca.com/hra-affordability-calculator

“#Individual Coverage ICHRA”
and the EBHRA “Excepted Benefit HRA ” (can’t pay premiums)

Advantages of the Individual Coverage HRA ICHRA  include, but are not limited to:

• Funds can be used to reimburse the employee’s premiums for an individual health insurance policy.   Get a quote. 
  • Employer Contribution will affect tax credits – Learn more here
• Reimbursements made to employees do not count towards the employee’s taxable wages.
• The employer can choose to roll-over unused amounts into the following year.
• Coverage can be offered to different classes of employees (e.g.; full-time, part-time, seasonal, salaried, hourly)
  • Contrast to Management Carve Outs §2716 Salary Discrimination
• An offer of the Individual Coverage HRA represents an “offer of coverage” under the employer mandate, however, contributions must meet affordability guidelines. (affordability Health Care.gov) The IRS will release further guidelines regarding this later.
• ICHRA will allow businesses the alternative to offer employees a monthly allowance of tax-free money. It allows them to buy individual health coverage tailored to fit their unique needs, control costs, and address ACA compliance for applicable large employers.  ^ICHRA.com *

The  ICHRA  Individual Coverage HRA also comes with restrictions and regulations including but not limited to:

• An offer of an Individual Coverage HRA cannot be made to any employee that is offered a traditional group health plan.
• If an offer of coverage is made to a class of employees, there is a minimum class size that is required. Size is typically 10% of that specific class of employees. For example, if an employer has 200 employees, a minimum of 20 employees would have to be in a specified class.
• Contributions can be in any amount that the employer chooses, but contributions must be consistent for all employees in a specified class.
• The employer must provide notice of the Individual Coverage HRA to employees.
• The employer must be able to substantiate that the employee is enrolled in an individual plan or Medicare (model notices are available).
• The employer must notify employees on an annual basis that the individual health insurance is NOT subject to ERISA.
• The final rule also created the “Excepted Benefit HRA“ which, starting in January of 2020, will permit employers to finance additional medical care. Employees can use the HRA without having to be enrolled in the group’s traditional health plan.
  • The requirements associated with the “Excepted Benefit HRA” include, but are not limited to:

• • • The annual contribution is capped at $1,800.
    • It must be offered in conjunction with a group health plan, but there is no requirement for the employee to enroll in that plan.
    • The “Excepted Benefit HRA” cannot be used to fund group health or Medicare premiums.
    • It can fund premiums for dental, vision, or short-term limited duration insurance.
• Employers who want to offer the “Individual Coverage HRA”  can do so but employees will need to enroll in an individual plan during the open enrollment period.  ^{benefitmall.com} * ^{TASO FAQ’s} * ^{Take Command Heatlh FAQ’s} * ^{Health Care.gov} *    ^SHRM.org *^FAQ’s

FAQ’s, Links & Resources

• Complete ICHRA Guide
  • Complete ICHRA & QSEHRA comparison Guide ichra.com

  • General ICHRA Questions

  • Designing an ICHRA

  • Employer Requirements

  • Employee Coverage Requirements

  • Affordability and Tax Credits

  • Interactions between ICHRA and other plans

• Section 105 Non Discrimination requirements
• CMS.Gov FAQ’s
• SHRM’s  New Final Rule Lets Employees Use HRAs to Buy Health Insurance
  • final rules concerning Health Reimbursement Arrangements (HRAs).
• people keep.com//what-to-expect-from-the-individual-coverage-hra-ichra-in-2020
• Commission Opinion Letter: Individual Coverage Health Reimbursement Arrangements (ICHRA) under the ADEA  EEOC.gov *