HRA Administration for Small Business - HRA Plan Docs

The New HRA for Qualified Small Employers The passage of the 21st Century Cures Act in December of 2016 minted a new HRA benefit, the Qualified Small Employer HRA. The law was essentially a compromise between lawmakers, who understood that small businesses that did not offer traditional group health benefits wanted to provide a non-traditional health benefit, and the Departments of Labor and Treasury, which had issued coordinated guidance in 2013 effectively barring small businesses from using existing tax law under 26 CFR 1.105-11 for tax free reimbursement of medical expenses if the plan had two or more eligible participants. The Departments contended that “old” Section 105 plans were “group health plans” and therefore subject to the ACA’s “market reforms” which apply to all group health plans. To bypass the ACA, congress wrote the “new” law, forming the QSEHRA, under 26 U.S. Code §9831, exceptions to group health plans. The Same but, Different The reimbursement p

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 Should this guidance be repealed, HRA Plan Docs is prepared to immediately offer Section 105 plans for small businesses.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 ch

My employees are on their spouse's work insurance. A common speed bump for employers considering a reimbursement plan is understanding how employees that have medical insurance coverage through a spouse's employer will benefit. This is called employer-sponsored coverage. The most common example: employees having coverage through a spouse. There are two "types" of major medical insurance: Individual: meaning it is purchased by a person, an individual, as opposed to an organization. Individual coverage can cover an entire family. "Individual" refers to the purchaser. Individual insurance follows the individual, it is not tied to employment. Group: meaning it is purchased by an organization and offered to employees of the organization. Group coverage follows the organization, when one leaves the organization the coverage does not follow. All group coverage is sponsored by an "employer" or organization. Most employers offering group covera

Confused About S-Corp Reimbursement Arrangements? Everybody seems to be confused about S-Corp shareholder participation in medical reimbursement plans. There is also confusion about S-Corp shareholders deducting health insurance costs and the steps that need to be taken to allow the deduction. This post is for S-Corp shareholders, why you absolutely want to participate in your business’s reimbursement plan and how to achieve the same tax advantage as your employees. Health reimbursement arrangements are all actually a version of a Self Insured Medical Reimbursement Plan, codified in 26 CFR 1.105-11. The different acronyms associated with the plans, HRA, HRP, MRP, MERP, HIRP, et al, are not exactly legal terms, even though you will find them in Treasury guidance, these are acronyms coined by administrators, brokers, insurance carriers and even the government to distinguish them from one another. They can have different plan structures and eligible expense exclusions depending

Yes, you can have an HRA and an HSA at the same time and it is great... Okay, but there are some rules you have to follow and some extra work for the administrator. First, if you are making tax-free contributions to an HSA, the IRS requires  that individuals have a minimum deductible on their health insurance from all sources (including HRAs and QSEHRAs) in order to make tax deductible contributions to their Health Savings Account (HSA). We call this an HRA Deductible. However, there are some expenses that can be reimbursed through the HRA without regard to an HRA Deductible. These expenses include: Insurance premiums Wellness/preventive care Expenses resulting from accidents Dental expenses Vision expenses Real World Application It is important there is no confusion between having an HSA and making contributions to an HSA. Funds from an HSA can be used to pay for the qualified medical expenses of the account holder and her dependents, even if the account holder is no