Employers and Benefits Practitioners Eagerly Await Final Regulations on Expanded Use of HRAs -

The Internal Revenue Service (IRS), Department of Labor (DOL) and Department of Health and Human Services (HHS, together with the IRS and the DOL, the “Agencies”) jointly issued proposed regulations (83 Fed. Reg. 54,420) (the “Proposed Regulations”) in late 2018 that would expand the situations in which employers could use health reimbursement accounts (“HRAs”) without violating certain Affordable Care Act (“ACA”) requirements. Of particular note, under the Proposed Regulations, the use of HRAs in connection with individual health insurance coverage would no longer be prohibited if certain conditions are met; prior ACA guidance had effectively prohibited the integration of HRAs with such coverage (see our March 2015 article for more information). Because the guidance in the Proposed Regulations would increase the usability of HRAs by employers, the guidance should be of interest to any employer who offered HRAs to its employees before the prior ACA guidance, and to any employer that wishes to offer HRAs to its employees in future plan years.