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August 23, 2011

HRB 39 - Relief for Stand-Alone Health Reimbursement Arrangements

Released August 23, 2011I Download as a PDF

August 23, 2011 -- Some welcome new guidance for stand-alone health reimbursement arrangements (HRAs) has just been issued by the HHS’ Center for Consumer Information and Insurance Oversight (CCIIO). As background, the Affordable Care Act prohibits health plans from imposing annual and lifetime limits. Certain plans, primarily so-called "mini-med plans," can seek a waiver from the prohibition of annual and lifetime limit provision. Earlier guidance on this issue exempted integrated HRAs. CCIIO has now issued a class exemption for stand-alone HRAs that were in existence on September 23, 2010.

The new guidance clarifies that any stand-alone HRAs in existence on or before September 23, 2010 will not be required to seek a waiver. This exemption will apply until January 1, 2014. There is an outstanding question about the viability of stand-alone HRAs in 2014 and beyond.

It is important to note that HRAs exempt from applying for an annual limit waiver must still comply with recordkeeping standards and the annual notice requirements:

  • Records must be maintained to substantiate the waiver exemption.
  • Plans are required to annually notify affected individuals that the plan does not meet the restricted annual limits for essential benefits. The Annual Notice must be provided to eligible participants, and included in plan materials that describe the terms of coverage, such as summary plan descriptions, for each plan year for which the exemption applies.

While there aren’t many stand-alone HRAs, this guidance should come as welcome news to sponsors of those few types of arrangements currently existing.

Prior CBIZ Health Reform Bulletins related to Annual and Lifetime Waivers: 


About the Author: Karen R. McLeese is Vice President of Employee Benefit Regulatory Affairs for CBIZ Benefits & Insurance Services, Inc., a division of CBIZ, Inc. She serves as in-house counsel, with particular emphasis on monitoring and interpreting state and federal employee benefits law. Ms. McLeese is based in the CBIZ Leawood, Kansas office.



The information contained herein is not intended to be legal, accounting, or other professional advice, nor are these comments directed to specific situations. The information contained herein is provided as general guidance and may be affected by changes in law or regulation. This information is not intended to replace or substitute for accounting or other professional advice. You must consult your own attorney or tax advisor for assistance in specific situations. This information is provided as-is, with no warranties of any kind. CBIZ shall not be liable for any damages whatsoever in connection with its use and assumes no obligation to inform the reader of any changes in laws or other factors that could affect the information contained herein. As required by U.S. Treasury rules, we inform you that, unless expressly stated otherwise, any U.S. federal tax advice contained herein is not intended or written to be used, and cannot be used, by any person for the purpose of avoiding any penalties that may be imposed by the Internal Revenue Service.

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