HRA: New Final Rule Released

New Final Rule Lets Employees Use HRAs to Buy Health Insurance

Effective January 1, 2020, employers who do not offer group medical coverage will be able to fund “a new kind of health reimbursement arrangement” (HRA), which will be known as an individual coverage HRA (ICHRA).

The Society for Human Resource Management (SHRM) reports that “using an individual coverage HRA, employers will be able to provide their workers and their workers’ families with tax-preferred funds pay all or a portion of the cost of coverage that workers purchase on the individual market”.

According to Brian Blase, special assistant to the president for healthcare policy:

“We expect this rule to particularly benefit small employers and make it easier for them to compete with larger businesses by creating another option for financing worker health insurance coverage.”

SHRM further notes that businesses of all sizes are permitted to offer traditional group-health plans or ICHRAs, “but may not offer employees a choice between the two”.

For access to the full article, please click here.


The information included in this blog post originally appeared in an article from SHRM on June 14, 2019 written by Stephen Miller.

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