H&W: HRAs Receive Exemption From Annual Limit Restrictions
HRAs Receive Exemption From Annual Limit Restrictions: Under guidance from the HHS Center for Consumer Information and Insurance Oversight (CCIIO), Health reimbursement arrangements (HRAs) have been exempted from the annual limit restrictions in the Patient Protection and Affordable Care Act (PPACA) and do not need to apply individually for waivers or waiver extensions.
The guidance indicated that all HRAs set limits on the amount that can be spent and those limits would always be less than the annual dollar minimums of $750,000 in 2011, $1.25 million in 2012 and $2 million in 2013 established by the PPACA. Accordingly, applying the restrictions on annual limits to HRAs would result in a significant decrease in access to HRA benefits. Therefore, the guidance exempts as a class all HRAs that were in effect prior to September 23, 2010 from having to apply individually for an annual limit waiver for plan years beginning on or after September 23, 2010 but before January 1, 2014.
The latest guidance builds on an earlier notice in which HHS said that HRAs that are integrated with group plans would be exempt from the annual limit requirements as long as the plan to which it was linked met the annual limit requirements.
An HRA that is exempt from an annual limit still must comply with the record retention and annual notice requirements to participants and subscribers set forth in the supplemental guidance issued in June.
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