December 11, 2013

San Francisco’s HCSO: More FAQs on HRAs and 2014 Resources

Following last month’s Benefit Beat article discussion of recent updates relating to San Francisco’s Health Care Security Ordinance (HCSO), the Office of Labor Standards Enforcement (OLSE) posted additional FAQs specifically addressing Health Reimbursement Arrangements (HRA)

Of particular note, the OLSE affirms, and consistent with the Affordable Care Act (ACA), that funds from a stand-alone HRA contributed prior to December 31, 2013, and in accordance with the plan that was in place as on January 1, 2013, can continue to be used to satisfy the HCSO obligation.  No new contributions can be made to a stand-alone HRA after December 31, 2013. 

Generally, an HRA is considered “minimum essential coverage” as defined by ACA; thus, disqualifying an individual from government-provided premium assistance (available to qualifying individuals, specifically those who fall between 100 and 400% of Federal Poverty Level and who purchase coverage through the marketplace).  The FAQs affirm that an individual can waive his/her HRA account balance, i.e., forfeit the funds, to preserve the right to premium assistance; however, the HCSO requires that HRA funds be available for at least 24 months from the date of contribution, as well as satisfy additional criteria.

The FAQs affirm that if an individual waives HRA coverage prior to the exhaustion of 24 months, the employer will not have satisfied its HCSO obligation; and therefore, the employer would have to find another way to satisfy this obligation (see FAQ #3 for examples of health care expenditure options).

Additional 2014 Resources

The OLSE has made several 2014-related documents available on their website:

In addition, employers covered by the San Francisco HCSO are also required to submit an Annual Reporting Form by April 30th each year. The 2013 Annual Reporting Form is expected to be available on the OLSE’s website in March 2014.


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