HRA Expansion for 2020

New HRA Expansion for 2020

The Internal Revenue Service and several other government agencies just released new regulatory rules regarding health reimbursement accounts (HRAs). The Executive Order is designed to increase the usability of HRAs, to expand employers’ ability to offer HRAs to their employees, and to allow HRAs to be used in conjunction with nongroup coverage. The Order further provides that expanding “the flexibility and use of HRAs would provide many Americans, including employees who work at small businesses, with more options for financing their healthcare.”

If you do not currently offer group coverage, you now have a way to help offset the cost of health insurance coverage your employees purchase, through an individual coverage health reimbursement account (ICHRA).

Here's what you need to know about the ICHRA:

• Effective January 1, 2020, employees can use ICHRA funds to buy individual-market insurance.
• ICHRA funds are eligible for premiums only.
• Health savings account (HSA)-qualified health insurance purchased with funds from an ICHRA is HSA-compatible.
• Read the final ruling from the IRS for complete details.