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On Oct. 23, 2018, the Departments of Labor, Health and Human Services, 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.

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. In addition, contact Emery Benefit Solutions (sue@emerybenefitsolutions.com) today to learn more about this proposed rule and to get your questions answered.