We recently released an Update summarizing new proposed regulations that would expand the usability of health reimbursement arrangements (HRAs) if certain conditions are met. The proposed rules would establish two new types of HRAs that would be available to employers of any size and would permit HRAs that are integrated with individual health insurance coverage (ICHRAs), subject to certain conditions. If finalized, the proposed rules would be effective for plan years beginning on or after January 1, 2020.
The IRS has now also issued IRS Notice 2018-88 inviting comments regarding application of the employer shared responsibility (mandate) rules and the self-insured health plan Code section 105(h) nondiscrimination rules to ICHRAs. The notice proposes regulatory positions and requests comments on various issues, but it does not provide guidance on which taxpayers may rely.
While the proposed ICHRA approach may not fit the benefit strategies for many employers, it may be attractive to those employers and employees who are seeking a more defined contribution approach to health care coverage. Employers interested in adopting ICHRAs effective in 2020 will want to stay tuned for more information on these proposals. Conner Strong & Buckelew will provide alerts and updates as new information becomes available. Should you have questions, contact your Conner Strong & Buckelew account representative toll free at 1-877-861-3220. For a complete list of Legislative Updates issued by Conner Strong & Buckelew, visit our online Resource Center.