Wednesday, January 30, 2013

Ch-ch-changes, HRA-style

The ObamaTax promises to touch just about anything and everything health insurance-related. A recent email informed us about the latest on The ObamaTax 's impact on Health Reimbursement Arrangements (HRAs):

"The preamble to [The ObamaTax] distinguished between HRAs that are "integrated" with a group health plan and HRAs that are "stand-alone." ... The question has been whether a stand-alone HRA can be quilted with individual health insurance coverage (not employer-sponsored group coverage) to satisfy the requirements."

I turned to our on-call Alternative Benefits Guru, Lou G, who explained that "there have been employers who would provide an HRA benefit to their employees who are not covered by the group health plan (they have individual coverage, or coverage through a spouse, no coverage at all etc).  The IRS is saying that this is no longer allowed.

In order to have an HRA you must be enrolled in the group health plan, the concept of a "stand alone" HRA will not be permitted

In other words, if you're not on the group plan, you don't get access to those sweet, sweet HRA dollars. But remember: if you like your health plan, you can keep your health plan.

[Hat Tip: Angela F and FoIB Jeff M]
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