Can You Really Do That With an HRA?
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Webinar Q & A
At the end of the webinar, we blocked time off for live Q&A. However, we had so many questions submitted we couldn't answer them all in the time we had! We want to ensure we're answering every inquiry you may have, so we've compiled all answers and listed them out in groups below. You never know if someone's asking the same questions you may have, so be sure to glance through the full list below!
No, the employer is at liberty to set the limits for a standard/traditional HRA.
Yes, for employers with 20+ EE's, traditional HRA's are in fact subject to COBRA.
Retiree HRA's can be used for those under the age of 65, in most instances instead of reimbursing Medicare premiums, the plan reimburses individual health premiums.
No, S-Corp Shareholders cannot participate in the HRA, even if it were included in their taxable income. To be eligible for an HRA, one must be an employee. S-corporations aren’t subject to corporate income tax. Instead, shareholders that own more than 2% of the company's shares are taxed individually. That means S-corp owners aren’t considered employees, but self-employed, so they aren’t eligible to receive reimbursements through an HRA at all. This is similar in nature to how 1099's or contract workers are viewed, and are ineligible to participate in these types of plans.
If an employer offers a self-funded/level-funded Medical plan combined with an HRA, they are only responsible for one PCORI fee.
Yes, in a Mental Health HRA the plan could reimburse prescription expenses, it would make administration more complex and should be discussed in detail with the administrator.
Yes, Dental and Vision premiums and expenses can be reimbursed by both QSEHRA and ICHRA, however, keep in mind the EE will still be required to have eligible medical coverage in place, they cannot forego medical insurance and just use it for dental and vision.
The regulations make it subject to COBRA. The ICHRA itself is not an individual plan, it is a group health plan. When combined with eligible coverage, the ICHRA is even deemed minimum essential coverage for ACA purposes.
A QSEHRA or ICHRA, either one can be usre to reimburse coverage purchased on the Marketplace.
Typically Prescriptions Drugs purchased from another country are not reimburseable under any tax advatanged account, such as HRA, FSA, HSA, unless the prescription was consumed out of the country. Transporting prescriptions into the US from an international pharmacy would mean those expenses would typically be ineligible.
Employers are required to calculate a premium, either by hiring an actuary to calulate the premium or using past utlization to calculate expected utilzation for the plan year.
Typically regardless of the type of HRA, the rules surrounding eligible health expenses are going to be the same regardless of plan design (HRA, ICHRA, QSEHRA, EBHRA) , this means the same rule would apply to prescriptions purchased outside the US, meaning they would need to be consumed outiside of the US to be reimburseable.
Unlike ICHRA, QSEHRA was created as an "Excepted Benefit" to the ACA, this means COBRA does not apply and also 1094/1095 Reporting is not required. Although ICHRA and QSEHRA are very similar in nature, because of specific regulations related to each type of plan, they have significant differences related to coverage, eligibility, plan administration and compliance requirements.