On September 30, 2019, the Internal Revenue Service (IRS) published its proposed rules to clarify how the employer shared responsibility provisions and Section 105(h) nondiscrimination rules apply to health reimbursement arrangements (HRAs) and other account-based group health plans that are integrated with individual health insurance coverage or Medicare.
Also, the Centers for Medicare and Medicaid Services (CMS) announced its downloadable tool that gives employers access to specific rate information for the least expensive plan in a certain category (for example, the lowest cost silver plan for self-only coverage offered through the Exchange) based on an employee’s age and geographic location. According to CMS, employers will be able to use this tool to determine whether their offer of coverage through an individual coverage HRA would be considered affordable.
Public comments and requests for a public hearing on the IRS’ proposed rules are due by December 30, 2019.
Because employers may want to offer individual coverage HRAs beginning on January 1, 2020, before the IRS publishes its final regulations, employers may rely on the proposed regulations:
- Under Section 4980H for periods during any plan year of individual coverage HRAs beginning before the date that is six months following the final regulations’ publication; and
- Under Section 105(h) for plan years of individual coverage HRAs beginning before the date that is six months following the final regulations’ publication.
The IRS’ proposed rule is described in the Employer Shared Responsibility Provisions and Nondiscrimination sections of this Advisor.
Download the full Compliance Advisor for more information on the final rule.