The Future of HRAs with ACA Implementation.pdf - BASIC

23 Pages·2013·0.7 MB·English

by  Nick Viglione

The Future of HRAs with ACA
Implementation
Presented by: Darcy L. Hitesman, Esq.

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Webinar Objective
• Look at the impact of the Affordable Care
Act (ACA) on health reimbursement
arrangements (HRAs)

Question: Is there a future for HRAs?

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Webinar Agenda
• Background
– HRAs
– Uses for HRAs
• Affordable Care Act
– No Annual/Lifetime Maximums
• ACA + HRA = ?
• Suggestions
• Questions
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Background
• Shift from defined benefit to defined contribution
• Defined Contribution
– Approach
– Balance in account is what you get
– Balance determines what you can buy (i.e., benefits)
– More predictable cost

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Background
• Defined contribution has been used in a number
of ways:
– Because of cost sharing under major medical
– Because of expenses outside of major medical
expenses (Lasik, orthodontia)
– Because family cost shares are so high
– Encourages “thoughtful” use of dollars
• Has allowed defined benefit menu to go down
with a partial fill by defined contribution
• Has allowed accumulation over time

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Background
• Familiar Examples of Defined Contribution
– Health Flexible Spending Account (Health FSA)
– Health Reimbursement Arrangement (HRA)
– Health Savings Account (HSA)

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HRA Snapshot
• Health Reimbursement • Employer funded
Arrangement (HRA)
• No direct/indirect relationship
• Type of 105 self-insured with cafeteria plan
medical reimbursement plan
• No statutory maximum
• Reimbursable expenses can
• Carryover permitted
be 213(d) medical
• Spend down permitted
expenses
• Group health plan
• Recognized in 2002; IRS
• ERISA (including Form 5500)
Notice 2002-45
• Nondiscrimination testing

• Employee, spouse,
105(h)
dependent child, adult child

• Written plan document

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Reimbursable Expenses

• Maximum permitted – medical care under 213(d)
• Actual scope determined by plan design
• Many “flavors”
– Full scope of Section 213(d)
– Tied to employer provided group health plan coverage
– Limited scope or post deductible to preserve HSA
eligibility
– Premiums only
– Post employment access

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Affordable Care Act
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