Proposed Rule Issued to Expand Use of HRAs

Proposed Rule Issued to Expand Use of HRAs

On Oct. 23, 2018, the Departments of Labor (DOL), Health and Human Services (HHS) and the Treasury (Departments) issued a proposed rule that would expand the usability of health reimbursement arrangements (HRAs). Effective in 2020, the proposed rule would:

  • Allow HRAs to be used to reimburse the cost of individual market premiums on a tax-preferred basis, subject to certain conditions; and
  • Allow employers that offer traditional group coverage to provide an HRA of up to $1,800 per year (as adjusted) to reimburse certain qualified medical expenses.

This proposed rule was issued in response to a 2017 executive order directing federal agencies to expand access to HRAs.

The rule is proposed to be effective for plan years beginning on and after Jan. 1, 2020.  The DOL will be accepting comments on the proposed rule  until Dec. 28, 2018.

Kistler Tiffany Benefits will be providing a more detailed overview of the proposal in the upcoming November Client Newsletter.