January 13, 2017
New FAQs Address HRA Integration Scenarios
FAQs About Affordable Care Act Implementation Part 37
The regulatory agencies released FAQs on January 12, 2017, regarding integrated Health Reimbursement Arrangements (“HRAs”). For more information on integrated HRAs, please see our Alert from May 13, 2016. The new FAQs answered questions about the ability to integrate an HRA with a group medical plan sponsored by another employer (i.e., an employer other than the employer sponsoring the HRA). The FAQs are available here.
The FAQs confirm that an HRA covering the medical expenses of employees and their spouses and dependents (a “family HRA”) may be integrated with a group medical plan sponsored by another employer (e.g., the spouse’s employer) if that group medical plan meets all of the applicable integration requirements. In addition, a family HRA will also qualify as an integrated HRA if the employee has self-only coverage under the employer’s group medical plan and the employee’s spouse and dependents have coverage under another employer’s group medical plan (assuming that group medical plans meet the applicable integration requirements). There had been some uncertainty about this second situation due to the wording of Notice 2015-87. The agencies have now eliminated that uncertainty.
The FAQs also confirm that for purposes of determining whether a family HRA is integrated with a group medical plan sponsored by another employer, the employer sponsoring the HRA may rely on the reasonable representation of an employee that the employee and/or his/her spouse and dependents are also covered by another employer’s group medical plan that meets the integration requirements.
Reminder: Providing HRA coverage triggers a requirement to report that HRA coverage under Internal Revenue Code Section 6055 (i.e., the minimum essential coverage reporting requirement) if all of the covered individuals (employees, spouses, and dependents) are not also enrolled in your group medical plan (i.e., they are enrolled in another employer’s group medical plan). We suggest you keep that additional administrative burden in mind as you design your integrated HRAs.
If you have any questions about the integrated HRA requirements, please contact us.