2015 HRA and FSA Guidance

HRA and FSA Guidance

This guidance confirms and clarifies prior guidance. Key provisions include:

HRAs for Active Employees – For plan years beginning in 2014, employers cannot offer a stand-alone HRA to employees. Employers can only offer HRAs that are integrated with a group health plan.

Integrated HRAs – For an HRA to be integrated with a group health plan, the following requirements must be met:

  • The HRA is only available to employees enrolled in group coverage;
  • The employer must offer a group health plan that provides minimum value or that does not consist solely of excepted health benefits.
  • The employee must be enrolled in a group health plan (either the employer’s plan or another plan such as coverage through a spouse);
  • If the group health plan is self-insured and does not cover certain Essential Health Benefits (EHBs), the HRA cannot be used to reimburse EHBs that are not covered by the group health plan; and
  • The employee can waive future reimbursements from the HRA at least annually, and the remaining amounts in the HRA are forfeited if employment ends.

Retiree HRAs – A stand-alone retiree HRA that is used to pay health insurance premiums will be considered an employer-sponsored group health plan providing minimum essential coverage. As a result, a retiree covered by an HRA will not be eligible for premium tax credits through the Marketplace/Exchange.

FSAs – A health care FSA does not have to comply with PPACA if:

  • The employer also offers group health plan coverage; and
  • The maximum annual FSA benefits payable to any employee do not exceed two times the employee’s contribution (or, if greater, do not exceed $500 plus the employee’s contribution).

Employer Payment Plans – Employers may not reimburse an employee’s premiums or pay premiums directly to an insurance company to purchase individual health insurance for an employee.

EAPs – An employee assistance program (EAP) will generally be considered not subject to PPACA market reforms, provided that the EAP does not provide significant medical care benefits.

For more details, here is a link to the guidance:

Application of Market Reform and other Provisions of the Affordable Care Act to HRAs, Health FSAs, and Certain other Employer Healthcare Arrangements

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