On Sept. 13, 2013 the Internal Revenue Service and U.S. Department of Labor issued Notice 2013-54 and Technical Release 2013-3, respectively, which “clarify” some of the rules as they relate to Health Reimbursement Arrangements (HRA) and pre-tax contributions for certain benefits.
Please see the following release highlights, which aren’t meant to be a thorough analysis, but rather a way to answer some of the questions that The Harrison Group has received since September.
- Beginning for Plan Years beginning on or after Jan. 1, 2014, employees can’t pay for individual medical insurance premiums for policies purchased outside of an exchange, on a pre-tax basis through a Section 125 Plan.
- Insurance premiums paid on Jan. 1, 2014 or thereafter for policies purchased on a state or federal exchange can’t be paid for through a Section 125 Plan, regardless of when the Plan Year began.
- Premiums for dental, vision and other excepted benefits continue to be eligible for pre-tax treatment through a Section 125 Plan whether it is purchased on a group or individual basis.
- An HRA can reimburse medical expenses if the HRA is integrated with the employer’s group medical plan.
An HRA can’t reimburse medical expenses that apply to an individual medical insurance policy.
There are many other provisions with which you will need to comply. We suggest that you review your clients’ plans to make sure that they are complying with the HRA/FSA regulations and have the plans amended if appropriate.
For clarification or help with compliance, please contact The Harrison Group President Rich Miller at 610.853.9075 or e-mail firstname.lastname@example.org.