Many of you have been asking for clarification from the Administration about previously issued guidance concerning the possibility of employer groups using stand-alone HRAs to finance individual market coverage for employees. Today, the Department of Treasury issued Notice 2013-54, which emphatically clarifies that HRAs and other group health plan policies that might have been used by employees to purchase individual policies would be subject to the law’s market-reform requirements, and that such standalone HRAs and other policies would not meet the law’s requirements relative to annual limits and preventive care benefits. To meet the law’s market-reform requirements, HRAs and other arrangements must be integrated with group coverage.
The only group policies that are not subject to the law’s market-reform requirements are those that only provide excepted benefits. If an employer provides a health FSA that does not qualify as excepted benefits, the health FSA generally is subject to the market reforms, including the preventive services requirements. Because a health FSA that is not excepted benefits is not integrated with a group health plan, it will fail to meet the preventive services requirements.
Until rulemaking is finalized, through at least 2014, the Administration will consider an employee assistance program, or EAP, to constitute excepted benefits only if the EAP does not provide significant benefits in the nature of medical care or treatment. For this purpose, employers may use a reasonable, good faith interpretation of whether an EAP provides significant benefits in the nature of medical care or treatment.
Finally, the guidance states that coverage provided through Code § 125 plans, employer payment plans, health FSAs and HRAs are eligible employer-sponsored plans and, therefore, are minimum essential coverage unless the coverage consists solely of excepted benefits. Individuals who have access to such coverage will not be eligible for exchange-based subsidies.