The
Departments of Labor, Health and Human Services, and the Treasury
(Departments) have 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.
What Does
This Mean for Employers?
According
to the Departments, the proposed rule is intended to provide a
more affordable and manageable option for employers that have
struggled to offer health coverage to their employees. As a
result, the Departments anticipate that the proposed rule could
dramatically increase the choices of coverage available for
workers and their families.
Comments
on the proposed rule will be accepted until Dec. 28, 2018. The
rule, if finalized, is proposed to be effective for plan years
beginning on and after Jan. 1, 2020.
Where Can I
Get More Information?
For
more information on the rule, please visit the Department of
Labor's website, which features a press release
about this proposed rule.
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