Executive Order Seeks to Expand Use of HRAs

Executive Order Signing

On October 12, 2017, the President signed an executive order asking the Departments of Treasury, HHS and Labor to explore how they can allow more businesses to use Health Reimbursement Arrangements (HRAs).

How does this affect the QSE-HRA and how should you plan for your small business?

Until guidance is issued from the departments, there is no impact on Qualified Small Employer HRAs. Current regulatory requirements have not been changed by the executive order.

We at Plan Docs anticipate a roll-back of the guidance provided under IRS Notice 2013-54 and Technical Release 2013-03, which subjected Section 105, Self Insured Medical Reimbursement Plans, commonly referred to as HRAs, to the “market reforms” of the ACA.

Should this guidance be repealed, HRA Plan Docs is prepared to immediately offer Section 105 plans for small businesses. Moreover, we will provide existing clients the option of transitioning from the QSE-HRA to a Section 105 plan at no charge.

Comments

IRS Issues New Guidance on QSEHRA Plans

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...

Can I have an HSA and a QSEHRA at the same time?

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...

Serving Faith Based Nonprofits

Keeping up with legislation has been difficult on churches. Over the past two years I have had dozens and dozens of difficult conversations with clergy from small, local Churches who have been tearfully concerned about their health insurance. Most have faced a series of events that has pushed their ability to maintain adequate health coverage into a death spiral. Notices of a large premium increases, that they can not afford, combined with conflicting information regarding the ability of Churches to contribute to clergy's health insurance premiums has created a crisis. In 2016, fewer than half of the solo pastors in the U.S. received any health insurance benefits. Many small businesses and practitioners I work with had not heard of an HRA prior to the 2013 IRS guidance that attempted to prohibit them. But small Churches with solo pastors, they have been using defined contribution plans or some form of "employer payment plan" since before Revenue Ruling 61-146 was i...

HRA Administration for Small Business - HRA Plan Docs

Search This Blog