Novel IRS Guidance on HRAs, VEBAs and Domestic Partner Benefits

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The Internal Revenue Service (IRS) recently provided guidance on several issues never before addressed. The guidance came in the form of a Private Letter Ruling (PLR), to be released later this year to the public under the Freedom of Information Act. The PLR addresses the technical tax and benefit issues that arise when a Health Reimbursement Arrangement (HRA) (funded through a Voluntary Employees’ Beneficiary Association (VEBA)) provides coverage to a domestic partner who does not qualify as a dependent under the Internal Revenue Code.

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The HRA, which was the subject of the PLR, is funded through a VEBA and is therefore qualified as tax-exempt under Internal Revenue Code §501(c)(9). It is proposed that the plan be amended to provide HRA coverage to the domestic partners of participants. Though the IRS had previously provided guidance regarding the tax implications of a medical plan providing coverage to domestic partners who do not qualify as dependents, the taxpayer requested guidance with respect to the unique questions that arise when the plan in question is an HRA or when it is funded through a VEBA.

Please see full advisory below for more information.

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Topics:  FOIA, HRA, IRS, Private Letter Rulings

Published In: Health Updates, Labor & Employment Updates, Tax Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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