Yesterday, the Departments of Labor, Treasury, and Health and Human Services issued final regulations allowing health reimbursement arrangements (“HRAs”) to reimburse premiums for individual medical insurance purchased by employees, provided certain conditions are met. The regulations are effective January 1, 2020, and are an about-face to the rules adopted by the Obama administration strictly prohibiting such arrangements.
The final rules also outline new standards for when an HRA will be considered an “excepted benefit” that is exempt from many federal group health plan requirements that are generally inconsistent with account-based plans such as HRAs (for example, the prohibition on annual dollar limits).
We will provide additional information about the new rules in a future Legal Alert. If you have questions about these new rules in the meantime, please contact your Executive Compensation and Employee Benefits Counsel at Smith, Gambrell & Russell, LLP.
A discussion of the proposed version of the regulations was published in our October 25, 2018 post.