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Stand-alone HRAs exempted from annual minimum dollar limits


WASHINGTON—Sponsors of stand-alone health reimbursement arrangements will not be required to seek waivers from federal rules that restrict annual dollar limits on coverage of essential benefits, the Department of Health and Human Services said.

The class exemption issued Friday applies to all stand-alone HRAs that were in effect prior to Sept. 23, 2010. As a result, plan sponsors will not have to apply for waivers from the annual minimum dollar limit of $750,000 in 2011, $1.25 million in 2012 and $2 million in 2013.

Applying the limits to stand-alone HRAs would “result in a significant decrease in access to HRA benefits,” HHS said in a bulletin.

“The good news is that through 2013 you can have a stand-alone HRA. The bad news is you can't after 2013,” said Rich Stover, a principal with Buck Consultants L.L.C. in Secaucus, N.J.

The latest guidance builds on an earlier notice in which HHS said that HRAs that are integrated with group plans would be exempt from the annual limit requirements as long as the plan to which it was linked met the annual limit requirements.

Relatively unusual

Stand-alone HRAs are relatively unusual. They have, though, been used by employers to meet requirements set by a San Francisco law that requires employers to spend a minimum amount of money on health care coverage for employees in the city.

HRAs also have been used by employers to help retirees pay for health care coverage, though federal regulators made it clear earlier that annual limit requirements do not apply to retiree-only plans. As a result, stand-alone HRAs for retiree-only plans are not affected by the annual limit requirements.

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