CCIIO Division of Small Business and Agent/Broker Innovation Agent and Broker Frequently Asked Questions Database September 16, 2020
Commented [OGC-bp1]: Legal (Global). If CCIIO hasn’t Agent and Broker Frequently Asked Questions Database already done so, Labor, Treasury and IRS colleagues should Health Reimbursement Arrangement FAQs be provided an opportunity to review these FAQs. Commented [SE2]: Confirming that Treasury and IRS have already reviewed and approved these FAQs. What is an Individual Coverage Health Reimbursement Arrangement? Commented [OGC-bp3]: Legal (Global). Edits are legal in An individual coverage Health Reimbursement Arrangement (HRA) is an alternative to traditional group nature, unless noted otherwise. health plan coverage that’s used to reimburse medical care expenses, like monthly premiums and out-of- pocket costs such as copayments and deductibles. Individual coverage HRAs can be offered by employers In addition, CMSD did not confirm the information in the hyperlinked material as part our review, but are happy to do of any size, as long as they have one employee who isn’t a self-employed owner or the spouse of a self- so upon request. employed owner. There are no annual minimum or maximum contribution requirements for an individual Commented [SE4]: Sources: coverage HRA, and this type of HRA can permit rollover of unused amounts from year to year. However, •https://www.healthcare.gov/ichra/ to meet the employer shared responsibility requirement, an applicable large employer’s contribution •https://www.healthcare.gov/small-businesses/learn- more/individual-coverage-hra/ level must ensure the employer’s individual coverage HRA offer is affordable to full-time employees. Commented [PN5]: Recommend adding a sentence here Learn more about the ESRP. to highlight that , while there are no minimums, a large employer subject to the mandate must meet a minimum to In order to be covered by and receive reimbursements for medical care expenses from the individual satisfy the mandate. coverage HRA, an individual coverage HRA requires employees and any covered spouse and dependents Commented [SE6]: Confirming this language and a link to the other FAQ have been added. to be enrolled in individual health insurance coverage; or Medicare Parts A and B, or Part C. This can include reimbursement for premiums for individual health insurance coverage offered on or off a Commented [PN7]: I was thinking of something simpler Marketplace. However, it does not include reimbursement for short-term, limited duration insurance or Commented [SE8]: Accepted coverage consisting solely of dental, vision, or other excepted benefits. Commented [OGC-bp9]: Non-Legal. Commented [SE10]: Accepted Employers can choose to offer an individual coverage HRA to all employees, or they can choose to offer it Commented [SE11]: Source: only to certain types of employees. These types — or classes — of employees must follow the https://www.cms.gov/CCIIO/Programs-and- classifications specified in the regulations (e.g., full-time or part-time). However, employers cannot offer Initiatives/Health-Insurance-Market- Reforms/Downloads/ICHRA-Pre-Open-Enrollment-Period- any employee a choice between a traditional group health plan and an individual coverage HRA. Find a Training.pdf (slide 6) full list of available classes here (PDF). Commented [PN12]: Seems repetitive. The previous paragraph already mentions an HRA can cover premiums. Learn more about how you can help clients who have an individual coverage HRA offer. Also, the sentence was quite long. Commented [SE13]: Accepted If you need additional assistance, contact the Agent/Broker Email Help Desk at FFMProducer- [email protected].
Helpful resources: • HealthCare.gov – What's an individual coverage HRA? • HealthCare.gov – Individual coverage Health Reimbursement Arrangements • Individual Coverage HRAs and the Marketplace (PDF) • New Health Coverage Options for Employers and Employees (PDF)
1 CLOSE HOLD – DO NOT SHARE INFORMATION NOT RELEASABLE TO THE PUBLIC UNLESS AUTHORIZED BY LAW: This information has not been publicly disclosed and may be privileged and confidential. It is for internal government use only and must not be disseminated, distributed, or copied to persons not authorized to receive the information. Unauthorized disclosure may result in prosecution to the full extent of the law.
CCIIO Division of Small Business and Agent/Broker Innovation Agent and Broker Frequently Asked Questions Database September 16, 2020
• Health Reimbursement Arrangements and Other Account-Based Group Health Plans Final Rule (PDF)
2 CLOSE HOLD – DO NOT SHARE INFORMATION NOT RELEASABLE TO THE PUBLIC UNLESS AUTHORIZED BY LAW: This information has not been publicly disclosed and may be privileged and confidential. It is for internal government use only and must not be disseminated, distributed, or copied to persons not authorized to receive the information. Unauthorized disclosure may result in prosecution to the full extent of the law.
CCIIO Division of Small Business and Agent/Broker Innovation Agent and Broker Frequently Asked Questions Database September 16, 2020
What is a Qualified Small Employer Health Reimbursement Arrangement? Small employers – generally those with fewer than 50 employees – that doesn’t offer group health Commented [SE14]: Sources: coverage to their employees can help employees pay for medical expenses through a Qualified Small •https://www.healthcare.gov/small-businesses/learn- more/qsehra/ Employer Health Reimbursement Arrangement (QSEHRA). Employees can use a QSEHRA to help pay for •https://www.healthcare.gov/qsehra/ their household’s health care costs for qualifying health coverage. Small employers can decide what to contribute to their employees’ and any covered spouse and dependents’ health care costs, up to the annual maximum; the annual maximum is adjusted year to year. This type of HRA can permit rollover of Commented [OGC-bp15]: Non-Legal. unused amounts from year to year. Commented [SE16]: Accepted
A QSEHRA allows small employers to provide non-taxed reimbursement of certain medical care expenses, like health insurance premiums and coinsurance, to employees who maintain minimum essential coverage, like a plan from the Individual Marketplace. To get non-taxed reimbursements from a QSEHRA, an employee (and any covered spouse and dependents) must be enrolled in minimum essential coverage. Commented [SE17]: Source: QSEHRAs allow small employers to help their employees purchase additional plan choices without the https://www.cms.gov/CCIIO/Programs-and- Initiatives/Health-Insurance-Market- employer having to manage group health plan coverage. Reforms/Downloads/ICHRA-Pre-Open-Enrollment-Period- Training.pdf (slide 7) To provide a QSEHRA to its employees, a small employer generally must: Commented [SE18]: Source: • Have fewer than 50 full-time employees. https://www.healthcare.gov/small-businesses/learn- more/qsehra/ • Provide the arrangement on the same terms to all eligible employees (reimbursement amounts may only vary based on age and the number of individuals covered). • Not offer a group health plan, such as Small Business Health Options Program (SHOP) coverage, or a flexible spending account.
If you need additional assistance, contact the Agent/Broker Email Help Desk at FFMProducer- [email protected].
Helpful resources: • HealthCare.gov – What's a QSEHRA? • HealthCare.gov – Health Reimbursement Arrangements (HRAs) for small employers • IRS Notice 2017-67 – Qualified Small Employer Health Arrangements
3 CLOSE HOLD – DO NOT SHARE INFORMATION NOT RELEASABLE TO THE PUBLIC UNLESS AUTHORIZED BY LAW: This information has not been publicly disclosed and may be privileged and confidential. It is for internal government use only and must not be disseminated, distributed, or copied to persons not authorized to receive the information. Unauthorized disclosure may result in prosecution to the full extent of the law.
CCIIO Division of Small Business and Agent/Broker Innovation Agent and Broker Frequently Asked Questions Database September 16, 2020
What is an Excepted Benefit Health Reimbursement Arrangement? Commented [SE19]: Sources: An excepted benefit Health Reimbursement Arrangement (HRA) allows employers to finance additional https://www.healthcare.gov/small-businesses/learn- more/hra-guide/ (“What is an excepted benefit HRA?”) medical care, like vision or dental coverage, coinsurance and copayments for individual health insurance coverage, short-term limited-duration insurance, or other health care costs not covered by their primary https://www.hhs.gov/sites/default/files/health- group plan. Excepted benefit HRAs cannot be used to reimburse individual health insurance coverage reimbursement-arrangements.pdf (Q11) premiums, group health plan premiums (other than COBRA or other group continuation coverage), or Commented [OGC-bp20]: Legal. To use the term of art. Medicare premiums. However, an excepted benefit HRA can be used to reimburse premiums for Commented [SE21]: Accepted individual health insurance coverage or group health plan coverage that consists solely of excepted benefits. This type of HRA, like the individual coverage HRA, allows rollover of unused amounts from year Commented [OGC-bp22]: Legal. For precision. See, e.g., to year. the June 2019 HRA Final Rule, 84 FR at 28937. Commented [SE23]: Accepted The annual contribution for an excepted benefit HRA must be limited to $1,800 per year (adjusted yearly Commented [PN24]: Recommend adding the rollover for inflation). An excepted benefit HRA must be offered with a traditional group health plan, although language to the ICHRA if it is going to be included here. employees aren’t required to enroll in the traditional group health plan. See frequently asked questions Otherwise it suggests this is unique to excepted benefit HRAs about HRAs for more information on excepted benefit HRAs. Commented [SE25]: Updated to clarify that both HRAs allow for rollovers; this rollover language is also included in the “What is an individual coverage HRA?” question on page If you need additional assistance, contact the Agent/Broker Email Help Desk at FFMProducer- 1 [email protected].
Helpful resources: • HealthCare.gov – Deciding between group coverage and an HRA? • New Health Coverage Options for Employers and Employees (PDF) • Health Reimbursement Arrangements and Other Account-Based Group Health Plans Final Rule (PDF)
4 CLOSE HOLD – DO NOT SHARE INFORMATION NOT RELEASABLE TO THE PUBLIC UNLESS AUTHORIZED BY LAW: This information has not been publicly disclosed and may be privileged and confidential. It is for internal government use only and must not be disseminated, distributed, or copied to persons not authorized to receive the information. Unauthorized disclosure may result in prosecution to the full extent of the law.
CCIIO Division of Small Business and Agent/Broker Innovation Agent and Broker Frequently Asked Questions Database September 16, 2020
How can I help consumers who have been offered an Individual Coverage Health Reimbursement Arrangement? An employer that offers employees an individual coverage Health Reimbursement Arrangement (HRA) must provide each employee with a written notice, generally at least 90 days before the start of the HRA’s plan year. If your client is offered an HRA by their employer, you should review the key information provided in this notice with your client, including the dollar amount of the HRA offer, the date that Commented [OGC-bp26]: Legal. Edits to further soften coverage may begin, and whether the offer extends to spouse and dependents. Learn more about the this language as I am not aware of a federal statutory or individual coverage HRA Employer Notice. regulatory obligation on agents/brokers that requires them to educate consumers about the employer’s HRA offer.
The type of assistance you may need to provide to an employee offered an individual coverage HRA Commented [SE27]: Accepted depends on their coverage status. If your client is already enrolled in individual health insurance coverage Commented [SE28]: Source: https://www.cms.gov/CCIIO/Programs-and- (or Medicare Part A and B or Medicare Part C), they don’t need to change coverage to meet the individual Initiatives/Health-Insurance- coverage HRA’s health coverage requirement. Marketplaces/Downloads/Individual-Coverage-Health- Reimbursement-Arrangements-and-the-Marketplace.pdf If your client isn’t enrolled in individual health insurance coverage or Medicare, you can help them (Slides 16-17) complete their application, select a plan, and enroll in coverage through the Marketplace. Your client may Commented [SE29]: Source: https://www.healthcare.gov/ichra/ also need help understanding if their individual coverage HRA offer is considered unaffordable for purposes of qualifying for advance payments of the premium tax credit (APTC), which cover a portion of Commented [OGC-bp30]: Legal. Edits to avoid confusion as the next sentence discusses APTC, which is only available the client’s premium, and the premium tax credit (PTC), which is claimed when they file their tax return. for Marketplace coverage. An alternative edit would also Agents and brokers should encourage their clients to visit this tool to determine the affordability of their delete the phrase “through the Marketplace” (So, the employer’s HRA offer. Learn more about individual coverage HRAs and PTC eligibility. sentence would read: “If your client is not enrolled in individual health insurance coverage or Medicare, you can help them complete their application, select a plan, and If your client (and any spouse or dependents) newly gains access to an individual coverage HRA outside enroll in coverage.”) the yearly Open Enrollment period, they qualify for a Special Enrollment Period to enroll in Marketplace Commented [SE31]: Accepted coverage or individual health insurance coverage offered outside the Marketplace. Learn more about Commented [SE32]: Noting that this is addressed in the special enrollment periods and HRAs. FAQ on Page 6: “If my client is offered an Individual Coverage Health Reimbursement Arrangement, are they still eligible If you need additional assistance, contact the Agent/Broker Email Help Desk at FFMProducer- for financial assistance through the Marketplace?” [email protected]. Commented [SE33]: Source: https://www.cms.gov/CCIIO/Programs-and- Initiatives/Health-Insurance- Helpful resources: Marketplaces/Downloads/Individual-Coverage-Health- • Individual Coverage HRAs and the Marketplace (PDF) Reimbursement-Arrangements-and-the-Marketplace.pdf • HealthCare.gov – What's an individual coverage HRA? (Slides 21-22) • HealthCare.gov – Individual Coverage Health Reimbursement Arrangements (information for Commented [SE34]: Edits from OGC on 10/27 employers) • Streamlined Marketplace Application Drilldown – Health Reimbursement Arrangements (Video) • Health Reimbursement Arrangement (HRA) Employee Affordability Tool (Video) • HRA Employee Affordability Tool
5 CLOSE HOLD – DO NOT SHARE INFORMATION NOT RELEASABLE TO THE PUBLIC UNLESS AUTHORIZED BY LAW: This information has not been publicly disclosed and may be privileged and confidential. It is for internal government use only and must not be disseminated, distributed, or copied to persons not authorized to receive the information. Unauthorized disclosure may result in prosecution to the full extent of the law.
CCIIO Division of Small Business and Agent/Broker Innovation Agent and Broker Frequently Asked Questions Database September 16, 2020
How can I help employers who’d like to offer an Individual Coverage Health Reimbursement Arrangement to their employees? Commented [SE35]: Sources: Agents and brokers can help employers understand eligibility requirements, coverage options, and costs •https://www.healthcare.gov/small-businesses/learn- more/hra-guide/ to decide if traditional group coverage or an individual coverage Health Reimbursement Arrangement •https://www.healthcare.gov/small-businesses/learn- (HRA) fits the needs of their business and employees. When exploring coverage options, you can also more/individual-coverage-hra/ encourage your employer clients to visit this HRA decision guide to see how an individual coverage HRA compares to other products and services that may be available to help cover employees.
Agents and brokers can also help employers determine if they’ll offer the individual coverage HRA to all employees, or only to certain types—or classes—of employees. These classes can be determined by certain job-based criteria, such as full-time or part-time, which are outlined in the final rule and in the FAQs on New Health Coverage Options for Employers and Employees. Employers cannot make up their own classes and may only make distinctions between the classes listed in the final rule (which may include a group of employees formed by combining two or more of the listed classes).
Generally, individual coverage HRAs must be offered on the same terms to all employees in a class. However, the annual reimbursement amount employees offer can vary within each employee class based on age (not to exceed a 3:1 ratio) or number of dependents, and employers can set a waiting period for new employees (not to exceed 90 days). There’s also a special rule for new hires allowing employers to Commented [OGC-bp36]: Legal. If accurate, for clarity. phase in an individual coverage HRA by offering it to newly hired employees or after a specified date Commented [SE37]: Accepted while maintaining their traditional group health plan for employees who began working for the employer prior to that date.
Employers also have the flexibility to decide how much they will contribute toward their employees’ medical costs by establishing an individual coverage HRA. There are no annual minimum or maximum Commented [OGC-bp38]: Legal. For clarity, as some contribution requirements for an individual coverage HRA. However, agents and brokers should employees with ICHRA offers may enroll in Medicare rather than individual health insurance coverage. encourage employers to consider how their individual coverage HRA offer will impact employees’ eligibility for advance payments of the premium tax credit (APTC) and the premium tax credit (PTC). The Commented [SE39]: Accepted impact to employees depends on the affordability of the offer, which is calculated based on the Commented [SE40]: This has been added in the paragraph below, along with a link to the IRS FAQs on section employer’s contribution, the employees’ household income, and the plans available in the employee’s 4980H: https://www.irs.gov/affordable-care- area. Note: If an employee accepts the employer’s individual coverage HRA offer, no matter whether the act/employers/questions-and-answers-on-employer-shared- HRA is considered affordable, the employee (or any spouse and dependents) is not eligible for APTC or responsibility-provisions-under-the-affordable-care-act PTC for their Marketplace coverage. Learn more about how affordability is determined.
While there are no annual minimum contributions, agents and brokers should also encourage applicable large employers to consider the implications of the Employer Shared Responsibility Provision (ESRP) under section 4980H of the Internal Revenue Code. Learn more about the ESRP from the IRS and from this FAQ.
6 CLOSE HOLD – DO NOT SHARE INFORMATION NOT RELEASABLE TO THE PUBLIC UNLESS AUTHORIZED BY LAW: This information has not been publicly disclosed and may be privileged and confidential. It is for internal government use only and must not be disseminated, distributed, or copied to persons not authorized to receive the information. Unauthorized disclosure may result in prosecution to the full extent of the law.
CCIIO Division of Small Business and Agent/Broker Innovation Agent and Broker Frequently Asked Questions Database September 16, 2020
If your employer client wants to offer an individual coverage HRA to their employees, they must provide Commented [SE41]: Source: the required notice to eligible participants as soon as they’re eligible to participate, and 90 days before https://www.hhs.gov/sites/default/files/health- reimbursement-arrangements.pdf the beginning of each plan year. Employees must be offered the chance to decline (or “opt out” of) the individual coverage HRA before the plan year begins. Employers can reference this sample notice for employers for more information.
Note: Under the established safe harbors, the individual health insurance coverage employees select will Commented [OGC-bp42]: Legal. To use the term of art. not be considered Employee Retirement Income Security Act (ERISA) plans if certain requirements are Commented [SE43]: Accepted met, including that the employer does not select or endorse any particular issuer or insurance coverage. For example, an employer that offers an individual coverage HRA may allow insurance agents and brokers to speak with employees or distribute informational materials at their worksite, as long as such accommodations are granted on an equal basis and without any preference for brokers that are appointed to sell coverage from a particular firm or health insurance issuer. Commented [SE44]: Noting that this section has been added per the Department of Labor’s instructions. If you need additional assistance, contact the Agent/Broker Email Help Desk at FFMProducer- [email protected].
Helpful resources: • Streamlined Marketplace Application Drilldown – Health Reimbursement Arrangements (Video) • Health Reimbursement Arrangement (HRA) Employee Affordability Tool (Video) • HRA Employee Affordability Tool • HealthCare.gov – Health insurance for businesses • HealthCare.gov – Deciding between group coverage and an HRA? • HealthCare.gov – What's an individual coverage HRA?
7 CLOSE HOLD – DO NOT SHARE INFORMATION NOT RELEASABLE TO THE PUBLIC UNLESS AUTHORIZED BY LAW: This information has not been publicly disclosed and may be privileged and confidential. It is for internal government use only and must not be disseminated, distributed, or copied to persons not authorized to receive the information. Unauthorized disclosure may result in prosecution to the full extent of the law.
CCIIO Division of Small Business and Agent/Broker Innovation Agent and Broker Frequently Asked Questions Database September 16, 2020
If my client is offered an Individual Coverage Health Reimbursement Arrangement, are they still eligible for financial assistance through the Marketplace? For individuals who are offered but decline (or “opt out” of) an individual coverage Health Reimbursement Arrangement (HRA), eligibility for financial assistance through the Marketplace depends Commented [SE45]: Edited to address OL’s change about on whether the individual coverage HRA is considered affordable for the employee. abbreviation.
If your client is offered an individual coverage HRA that is affordable based on standards set forth in the Commented [SE46]: Source: final rule, they’re not eligible for advance payments of the premium tax credit (APTC) for their https://www.cms.gov/CCIIO/Programs-and- Marketplace coverage or the Marketplace coverage of any household members (spouse and dependents) Initiatives/Health-Insurance-Marketplaces/Downloads/AB- Summit-Individual-Coverage.pdf to whom the individual coverage HRA offer extends, regardless of whether or not they accept the individual coverage HRA.
However, if the individual coverage HRA is not affordable based on standards set forth in the final rule and your client chooses to decline (or “opt out” of) the individual coverage HRA, your client and any family members to whom the individual coverage HRA offer is extended to may qualify for APTC, if otherwise eligible, for their Marketplace coverage.
• If the offer is affordable: Your client won’t be eligible for APTC (or the PTC when they file their tax Commented [SE47]: Source: return) for their Marketplace coverage. This also applies to spouses and dependents to whom the https://www.cms.gov/CCIIO/Programs-and- Initiatives/Health-Insurance- individual coverage HRA offer extends. Marketplaces/Downloads/Individual-Coverage-Health- • If the offer is not affordable: Your client must decline (or “opt out” of) the individual coverage Reimbursement-Arrangements-and-the-Marketplace.pdf HRA to qualify for APTC, or to claim the PTC, if otherwise eligible, for their Marketplace coverage. (Slide 11) APTC and PTC aren’t allowed for the Marketplace coverage of the employee if the employee chooses to be covered by an individual coverage HRA, regardless of whether the individual coverage HRA is affordable. This also applies to spouses and dependents to whom the individual coverage HRA offer extends.
Learn more about how you can help your client determine if their individual coverage HRA is considered affordable (PDF).
If you need additional assistance, contact the Agent/Broker Email Help Desk at FFMProducer- [email protected].
Helpful resources: • Streamlined Marketplace Application Drilldown – Health Reimbursement Arrangements (Video) • Health Reimbursement Arrangement (HRA) Employee Affordability Tool (Video) • HRA Employee Affordability Tool • Individual Coverage HRA Worksheet (PDF) • HealthCare.gov – What's an individual coverage HRA? • Individual Coverage HRAs and the Marketplace (PDF) • New Health Coverage Options for Employers and Employees (PDF)
8 CLOSE HOLD – DO NOT SHARE INFORMATION NOT RELEASABLE TO THE PUBLIC UNLESS AUTHORIZED BY LAW: This information has not been publicly disclosed and may be privileged and confidential. It is for internal government use only and must not be disseminated, distributed, or copied to persons not authorized to receive the information. Unauthorized disclosure may result in prosecution to the full extent of the law.
CCIIO Division of Small Business and Agent/Broker Innovation Agent and Broker Frequently Asked Questions Database September 16, 2020
• Health Reimbursement Arrangements and Other Account-Based Group Health Plans Final Rule
9 CLOSE HOLD – DO NOT SHARE INFORMATION NOT RELEASABLE TO THE PUBLIC UNLESS AUTHORIZED BY LAW: This information has not been publicly disclosed and may be privileged and confidential. It is for internal government use only and must not be disseminated, distributed, or copied to persons not authorized to receive the information. Unauthorized disclosure may result in prosecution to the full extent of the law.
CCIIO Division of Small Business and Agent/Broker Innovation Agent and Broker Frequently Asked Questions Database September 16, 2020
Can my group client offer an Individual Coverage Health Reimbursement Arrangement to satisfy the Employer Shared Responsibility Provision under section 4980H of the Internal Revenue Code?
An offer of an individual coverage Health Reimbursement Arrangement (HRA) counts as an offer of Commented [OGC-bp48]: Legal. To align with the cited coverage under the employer shared responsibility provision (ESRP) under section 4980H of the Internal FAQ, which does not include a “may” – instead it affirmatively states “An offer of an Individual Coverage HRA Revenue Code. Note: Only certain employers – generally those with at least 50 full-time employees, counts as an offer of coverage under the employer including full-time equivalent employees, in the prior year – are applicable large employers subject to the mandate”. ESRP. Commented [SE49]: Accepted
In general, whether an applicable large employer is liable for a payment under the ESRP will depend on whether the employer offers its full-time employees (and any dependents) the opportunity to enroll in employer-sponsored, minimum essential coverage, like an individual coverage HRA, as well as whether the employer’s coverage offer, like an individual coverage HRA, is affordable and whether a full-time Commented [OGC-bp50]: Non-Legal. To align with the employee is allowed a premium tax credit (PTC) under section 36B of the Internal Revenue Code. scope in the initial part of the sentence, which isn’t limited to ICHRAs. Affordability, for purposes of the ESRP, generally is determined under the PTC rules and is based, in part, on the amount the employer makes available under the individual coverage HRA. Learn more about Commented [SE51]: Accepted affordability.
If your group client is an applicable large employer that wants to offer an individual coverage HRA, to Commented [OGC-bp52]: Legal. For clarity. avoid liability for a payment under the ESRP, in general, they’ll need to contribute a sufficient amount for Commented [SE53]: Accepted the offer of the individual coverage HRA to be considered affordable. Employers can also use the employer affordability tool to help make an affordable offer to their full-time employees.
Depending on how much your client contributes to their employee’s individual health insurance coverage, the individual coverage HRA offer could impact the employee’s eligibility for the PTC. Learn more about PTC eligibility and individual coverage HRAs. Commented [SE54]: Source: Q7 of the HRA FAQs: https://www.hhs.gov/sites/default/files/health- reimbursement-arrangements.pdf If you need additional assistance, contact the Agent/Broker Email Help Desk at FFMProducer- [email protected].
Helpful resources: • HealthCare.gov – Individual coverage Health Reimbursement Arrangements (for employers) • New Health Coverage Options for Employers and Employees (PDF) • Individual Coverage HRAs and the Marketplace (PDF) • Health Reimbursement Arrangements and Other Account-Based Group Health Plans Final Rule (PDF)
10 CLOSE HOLD – DO NOT SHARE INFORMATION NOT RELEASABLE TO THE PUBLIC UNLESS AUTHORIZED BY LAW: This information has not been publicly disclosed and may be privileged and confidential. It is for internal government use only and must not be disseminated, distributed, or copied to persons not authorized to receive the information. Unauthorized disclosure may result in prosecution to the full extent of the law.
CCIIO Division of Small Business and Agent/Broker Innovation Agent and Broker Frequently Asked Questions Database September 16, 2020
How is an Individual Coverage Health Reimbursement Arrangement determined affordable for purposes of an employee’s eligibility for the Premium Tax Credit? For Premium Tax Credit (PTC) eligibility for coverage in 2020, an individual coverage Health Reimbursement Arrangement (HRA) is considered affordable for an employee if the premium for the lowest cost Marketplace self-only Silver plan available to the employee, minus the self-only HRA amount available to the employee, is less than 9.78% of the employee’s household income (adjusted annually for inflation). Employees offered an individual coverage HRA can use this Individual Coverage HRA Worksheet or this HRA Employee Affordability Tool to determine the affordability of their employer’s offer. Commented [SE55]: An FAQ regarding the employer mandate has been added above on page 8. This question and answer have been updated to reflect the employee Depending on the affordability of the offer, the individual coverage HRA offer could impact an employee’s affordability and direct to the FAQ on page 8. eligibility for advance payments of the PTC and the PTC. Learn more about financial assistance and individual coverage HRAs (PDF). Source for this FAQ: https://www.healthcare.gov/small- businesses/learn-more/individual-coverage-hra/
Applicable large employers can also offer an individual coverage HRA to satisfy the employer shared responsibility provision (ESRP) under section 4980H of the Internal Revenue Code. Learn more about the ESRP (PDF).
If you need additional assistance, contact the Agent/Broker Email Help Desk at FFMProducer- [email protected].
Helpful resources: • Streamlined Marketplace Application Drilldown – Health Reimbursement Arrangements (Video) • Health Reimbursement Arrangement (HRA) Employee Affordability Tool (Video) • HRA Employee Affordability Tool • HealthCare.gov – Individual coverage Health Reimbursement Arrangements (for employers) • New Health Coverage Options for Employers and Employees (PDF) • Individual Coverage HRAs and the Marketplace (PDF) • Health Reimbursement Arrangements and Other Account-Based Group Health Plans Final Rule (PDF)
11 CLOSE HOLD – DO NOT SHARE INFORMATION NOT RELEASABLE TO THE PUBLIC UNLESS AUTHORIZED BY LAW: This information has not been publicly disclosed and may be privileged and confidential. It is for internal government use only and must not be disseminated, distributed, or copied to persons not authorized to receive the information. Unauthorized disclosure may result in prosecution to the full extent of the law.
CCIIO Division of Small Business and Agent/Broker Innovation Agent and Broker Frequently Asked Questions Database September 16, 2020
Can an individual who has been offered an Individual Coverage Health Reimbursement Arrangement use a salary reduction arrangement under a cafeteria plan to pay for a portion of their Marketplace premium? No. Under section 125(f)(3) of the Internal Revenue Code, an employer may not allow employees to make salary reduction contributions to a cafeteria plan to pay the portion of the Marketplace coverage premiums not covered by the individual coverage Health Reimbursement Arrangement (HRA). Commented [SE56]: Source: https://www.cms.gov/CCIIO/Programs-and- Initiatives/Health-Insurance-Marketplaces/Downloads/AB- However, this restriction doesn’t apply to coverage that is purchased outside the Marketplace. Employers Summit-Individual-Coverage.pdf may allow employees to pay for outside-the-Marketplace health insurance on a tax-favored basis, using a Commented [SE57]: Source: salary reduction arrangement under a cafeteria plan, to make up any portion of the individual health https://www.cms.gov/CCIIO/Programs-and- insurance coverage premium not covered by the employee’s individual coverage HRA. Initiatives/Health-Insurance-Market- Reforms/Downloads/HRA-FAQs.pdf
If you need additional assistance, contact the Agent/Broker Email Help Desk at FFMProducer- [email protected].
Helpful resources: • New Health Coverage Options for Employers and Employees (PDF) • Individual Coverage HRAs and the Marketplace (PDF) • Health Reimbursement Arrangements and Other Account-Based Group Health Plans Final Rule (PDF)
12 CLOSE HOLD – DO NOT SHARE INFORMATION NOT RELEASABLE TO THE PUBLIC UNLESS AUTHORIZED BY LAW: This information has not been publicly disclosed and may be privileged and confidential. It is for internal government use only and must not be disseminated, distributed, or copied to persons not authorized to receive the information. Unauthorized disclosure may result in prosecution to the full extent of the law.
CCIIO Division of Small Business and Agent/Broker Innovation Agent and Broker Frequently Asked Questions Database September 16, 2020
My client has been newly offered an Individual Coverage Health Reimbursement Arrangement. Do they qualify for a Special Enrollment Period to enroll in individual coverage?
Yes. Employees and their dependents who newly gained access to an individual coverage Health Commented [SE58]: Source: Reimbursement Arrangement (HRA) in the past 60 days OR expect to gain access in the next 60 days https://www.cms.gov/CCIIO/Programs-and- Initiatives/Health-Insurance- qualify for a Special Enrollment Period to enroll in or change individual health insurance coverage through Marketplaces/Downloads/Individual-Coverage-Health- or outside of the Marketplace. The triggering event is the first day on which coverage for the qualified Reimbursement-Arrangements-and-the-Marketplace.pdf individual, enrollee, spouse or dependent under the individual coverage HRA can take effect.
Generally, the employee will need to apply for and enroll in individual health insurance coverage in time for it to take effect by the date that their individual coverage HRA starts. An employer might offer different options for when their individual coverage HRA can start to give the employee more time to enroll, so employees should contact their employer or check their individual coverage HRA notice to confirm.
If you need additional assistance, contact the Agent/Broker Email Help Desk at FFMProducer- [email protected].
Helpful resources: • Streamlined Marketplace Application Drilldown – Health Reimbursement Arrangements (Video) • Health Reimbursement Arrangement (HRA) Employee Affordability Tool (Video) • HRA Employee Affordability Tool • HealthCare.gov – What's an individual coverage HRA? • Individual Coverage HRAs and the Marketplace (PDF) • Health Reimbursement Arrangements and Other Account-Based Group Health Plans Final Rule (PDF)
13 CLOSE HOLD – DO NOT SHARE INFORMATION NOT RELEASABLE TO THE PUBLIC UNLESS AUTHORIZED BY LAW: This information has not been publicly disclosed and may be privileged and confidential. It is for internal government use only and must not be disseminated, distributed, or copied to persons not authorized to receive the information. Unauthorized disclosure may result in prosecution to the full extent of the law.
CCIIO Division of Small Business and Agent/Broker Innovation Agent and Broker Frequently Asked Questions Database September 16, 2020
Can an employer provide its employees with a debit card to facilitate reimbursements from their Individual Coverage Health Reimbursement Arrangement for their individual health insurance coverage premiums? The Final Rule regarding individual coverage Health Reimbursement Arrangements (HRAs) doesn’t change the methods currently allowed for facilitating reimbursements from HRAs, electronic or otherwise, outlined in IRS Notice 2006–69 and Revenue Ruling 2003–43. An employer administering an individual Commented [SE59]: Source: Final Rule, Page 31 (footnote coverage HRA can establish procedures to verify that participating employees (and their spouse or 125) household members) are enrolled in individual health insurance coverage (other than coverage consisting solely of excepted benefits) or Medicare through electronic means, as long as the procedures are Commented [OGC-bp60]: Legal. For precision / clarity. reasonable to verify enrollment. Generally, if debit cards are used, they must be restricted electronically Commented [SE61]: Accepted to limit their use to paying premiums and medical care costs for permitted expenses. Commented [SE62]: Source: Final Rule, Page 31
Commented [OGC-bp63]: Legal. This language (or Individual coverage HRA “reimbursement” through electronic means can include employee-initiated something similar) should be included as there are some payments using electronic financial instruments, like debit cards, as well as direct payments, individual or types of premiums and out-of-pocket medical costs that aggregate, by the employer, employee organization, or other plan sponsor to the health insurance issuer. ICHRAs cannot be used to reimburse (e.g., STLDI, group health plan coverage, excepted benefits).
Commented [SE64]: Accepted For additional information on the use of debit cards to reimburse HRA participants, see IRS Notice 2006– 69 and Revenue Ruling 2003–43. Commented [SE65]: Language added per direction from IRS/Treasury.
Commented [SE66]: Source: Final Rule, Page 64 Helpful resources: • Health Reimbursement Arrangements and Other Account-Based Group Health Plans Final Rule (PDF) • Background: IRS Notice 2006–69 (PDF) • IRS Notice 2006–69 (PDF) • Revenue Ruling 2003–43 (PDF) • Proposed Treasury Regulations § 1.125-6 (PDF)
14 CLOSE HOLD – DO NOT SHARE INFORMATION NOT RELEASABLE TO THE PUBLIC UNLESS AUTHORIZED BY LAW: This information has not been publicly disclosed and may be privileged and confidential. It is for internal government use only and must not be disseminated, distributed, or copied to persons not authorized to receive the information. Unauthorized disclosure may result in prosecution to the full extent of the law.