Three weeks ago, we told you about the executive order the President signed (in our blog post Executive Order Seeks to Expand Use of HRAs ). The order asked the Departments of Treasury, HHS and Labor to explore how they could allow more businesses to use Health Reimbursement Arrangements (HRAs). Today, the Internal Revenue Service (IRS) issued Notice 2017-67 . This notice provides long awaited guidance on the qualified small employer health reimbursement arrangement (QSEHRA). The QSEHRA plan is a great small business alternative group coverage. The plan was welcomed when it was signed into law in 2017 and, it overturned guidance previously issued by the Internal Revenue Service and the Department of Labor that stated that HRAs violated the ACA’s market reforms, subjecting small employers to a penalty for providing such arrangements. In this post, we will cover the notice in detail. What it means moving forward and its impact on existing plans. The Notice Today’s 59-pag
Wrong Question... Yes, you can have an HSA and a QSEHRA at the same time but, what you really want to know is if you can make tax free contributions to a Health Savings Account (HSA) in the same tax year you were provided a QSEHRA. That is a bit more complicated, let's jump into it. This article was prompted by IRS Notice 2017-67 which provided administrative and procedural guidance on the QSEHRA. The notice indicated a departure from the HRA compatibility requirements which call for a deductible on the HRA equal to the qualifying high deductible health plan (HDHP) deductible. According to the guidance, the QSEHRA is not permitted to impose a deductible therefore, may be disqualifying coverage for those provided the benefit by their employer. The determination comes down to what and whom is covered by the QSEHRA. Background Under section 223, individuals who have high deductible health plan (HDHP) coverage and no other disqualifying health coverage may contribute t