United States: Agencies Provide Additional Guidance on HRA Integration

Last Updated: March 30 2017
Article by Ron M. Present, CALA, CNHA, LNHA, FACHCA

Note to readers: As of this writing, efforts are still underway in Washington to repeal the Affordable Care Act. Please bear this in mind as you read the article below, and consult your benefits advisor for the latest developments.

A Health Reimbursement Arrangement (HRA) generally must be integrated with a qualifying non-HRA group health plan to satisfy the Affordable Care Act's (ACA's) annual limit prohibition and preventive services mandate. Integration must occur with respect to each employee, spouse and dependent covered by the HRA.

In 2015, the IRS clarified that a family HRA — one that reimburses the medical expenses of an employee's spouse or dependents — cannot be integrated with self-only coverage under the employer's non-HRA group health plan. Earlier this year, the Department of Labor, the Department of Health and Human Services and the IRS jointly issued two FAQs that address situations in which the non-HRA group health plan covering an employee, spouse or dependents is sponsored by the spouse's employer.

Clarifications and Obligations

The first FAQ confirms that a family HRA can be integrated with a non-HRA group health plan sponsored by the employer of an employee's spouse if that non-HRA plan covers all of the individuals who are covered by the HRA. For this purpose, the employer sponsoring the HRA may rely on its employees' reasonable representations that they and the other individuals covered by their family HRAs are also covered by non-HRA group health plans that meet the applicable integration requirements.

The second FAQ explains that a family HRA can be integrated with a combination of:

  1. Self-only coverage for the employee under a non-HRA group health plan sponsored by the employer that sponsors the HRA
  2. Coverage for the other individuals under a non-HRA group health plan sponsored by the spouse's employer

All individuals covered by a family HRA must also have non-HRA coverage. But the integration rules don't require that those individuals be enrolled in the same non-HRA group health plan or that the HRA and non-HRA group health plan share the same sponsor.

Please note, however, that integration with another employer's plan doesn't appear to relieve HRA sponsors of the obligation to maintain their own non-HRA group health plan that's not limited to excepted benefits and may impose reporting obligations under the ACA. Furthermore, if the non-HRA coverage doesn't provide minimum value, the HRA must limit reimbursements to co-payments, co-insurance, deductibles and premiums under the non-HRA coverage with which it's integrated. The HRA needs to also limit medical care expenses that aren't essential health benefits.

Additional Flexibility

If your organization sponsors an HRA, you'll likely welcome these clarifications and the additional flexibility they provide. In particular, you may appreciate confirmation that you can rely on employees' representations regarding non-HRA coverage sponsored by other employers (though details aren't provided regarding when reliance will be considered reasonable).

The DOL's Annually Adjusted Health Plan Penalties for 2017

In 2015, Congress enacted legislation requiring an initial "catch-up" adjustment to specified penalty amounts for benefit plan violations, followed by annual adjustments. Regulations issued in 2016 established the catch-up amounts and called for future adjustments by January 15 of each year, starting in 2017.

Sure enough, in January, the Department of Labor (DOL) issued the first annual adjustment of civil monetary penalties for a wide range of benefit-related violations. These adjustments are effective for penalties assessed after January 13, 2017, with respect to violations occurring after November 2, 2015.

For group health plans, the maximum penalty for failing to provide the summary of benefits and coverage required under the Affordable Care Act increases from $1,087 to $1,105 per failure. Penalties of $112 per participant per day, up from $110, may be assessed for:

  • Violations of the Genetic Information Nondiscrimination Act, such as establishing eligibility rules based on genetic information or requesting genetic information for underwriting purposes
  • Failures relating to disclosures regarding availability of Medicaid or children's health insurance program assistance

Also, the agency addressed the concern that the 2016 penalty increases affecting group health plans would discourage employers from adopting plans. The DOL expressed its view that the increases won't have a detrimental impact on employer-provided plans. The agency noted that it hasn't automatically imposed the maximum penalty in the past and has no plans to change its enforcement policy as a result of the increases.

If you have questions about HRAs, please contact Ron Present, Partner and Health Care Industry Group Leader, at rpresent@bswllc.com or 314.983.1358.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Ron M. Present, CALA, CNHA, LNHA, FACHCA
Similar Articles
Relevancy Powered by MondaqAI
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions