Compliance August 23, 2011

HHS Issues Class Exemption for Stand-Alone HRAs

August 23, 2011 (PLANSPONSOR.com) - Sponsors of stand-alone health reimbursement arrangements (HRAs) will not be required to seek waivers from federal rules that restrict annual dollar limits on coverage of essential benefits.
Reported by

 Business Insurance reports that the class exemption issued by the Department of Health and Human Services applies to all stand-alone HRAs that were in effect prior to September 23, 2010. As a result, plan sponsors will not have to apply for waivers from the annual minimum dollar limit of $750,000 in 2011, $1.25 million in 2012 and $2 million in 2013.   

Applying the limits to stand-alone HRAs would “result in a significant decrease in access to HRA benefits,” HHS said in a bulletin, according to Business Insurance.  

The news report said stand-alone HRAs are relatively unusual, but have been used by employers to meet requirements set by a San Francisco law that requires employers to spend a minimum amount of money on health care coverage for employees in the city (see San Francisco to Increase Health Care Spending Requirement).  

Federal regulators made it clear earlier that annual limit requirements do not apply to retiree-only plans.

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