Standalone HRAs will soon be a thing of the past. The Employee Benefits Security Administration, a division of the U.S. Department of Labor, provided a clarification on health reimbursement accounts late last week, ruling in a statement that HRAs are group health plans and therefore cannot have annual limits. The decision finalizes previous guidance that indicated government agencies would view HRAs in this way in compliance with the Affordable Care Act.
“I think people had suspected that standalone HRAs would not be viable after 2014,” says Linda Rowings, chief compliance officer for United Benefit Advisors, a group of independent brokerages throughout the U.S. “I think it’s very clear from this guidance that you can’t do standalone HRAs unless it’s for retirees or as a non-medical sort of benefit like dental or vision.”
The EBSA statement says, “a group health plan (or a health insurance issuer offering group health insurance coverage) may not establish any annual limit on the dollar amount of benefits for any individual.” In other words, because standalone HRAs would inevitably place a dollar amount on benefits, they will be tricky for any broker or plan to execute.
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