Washington policy update: August 2019 Benefits and Compensation Bulletin

IRS offers new options for stand-alone HRAs, including one that can be used to purchase individual health insurance

Posted by Robert Davis, Christine Drager, and Maria Moliterno on August 26, 2019.

Following enactment of the Affordable Care Act (ACA) of 2010, the IRS issued a series of rulings generally preventing employers from offering stand-alone HRAs (Health Reimbursement Arrangements) that active employees could use to purchase health insurance in the individual market, or pay other out-of-pocket medical expenses. But new regulations that will become applicable in 2020 will offer employers two new alternatives—the Individual Coverage HRA (ICHRA) and the Excepted Benefits HRA—that employers can use to provide stand-alone HRAs to active employees if certain conditions are met.
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