Close
Close

Proposed regulations on HRAs would allow integration with individual health insurance coverage

RFP
Tax Hot Topics newsletterThe Departments of Treasury, Labor, and Health and Human Services recently issued proposed regulations (REG-136724-17) that would expand the use of employer-based payments for medical expenses to include health reimbursement arrangements (HRAs) in certain circumstances. The rules would allow for HRAs to be integrated with individual health insurance coverage under the Affordable Care Act, provided certain conditions could be met. Employers could also offer HRAs regardless of whether their employees have coverage that satisfies market requirements or have no coverage at all if requirements are met.

The proposed regulations would also give employers the flexibility to define classes of employees as full-time, part-time and seasonal employees by relying on definitions under Sections 105(h) and 4980H. However, employers could only use one set of definitions pursuant to a chosen section of the Tax Code and must apply those definitions across the board for that plan year.

Contact
Jeff Martin
Partner, Washington National Tax Office
T +1 202 521 1526

Keith Mong
Managing Director, Washington National Tax Office
T +1 202 521 1554

James Sanchez
Senior Associate, Washington National Tax Office
T +1 202 861 4107

Tax professional standards statement 
This content supports Grant Thornton LLP’s marketing of professional services and is not written tax advice directed at the particular facts and circumstances of any person. If you are interested in the topics presented herein, we encourage you to contact us or an independent tax professional to discuss their potential application to your particular situation. Nothing herein shall be construed as imposing a limitation on any person from disclosing the tax treatment or tax structure of any matter addressed herein. To the extent this content may be considered to contain written tax advice, any written advice contained in, forwarded with or attached to this content is not intended by Grant Thornton LLP to be used, and cannot be used, by any person for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code.

The information contained herein is general in nature and is based on authorities that are subject to change. It is not, and should not be construed as, accounting, legal or tax advice provided by Grant Thornton LLP to the reader. This material may not be applicable to, or suitable for, the reader’s specific circumstances or needs and may require consideration of tax and nontax factors not described herein. Contact Grant Thornton LLP or other tax professionals prior to taking any action based upon this information. Changes in tax laws or other factors could affect, on a prospective or retroactive basis, the information contained herein; Grant Thornton LLP assumes no obligation to inform the reader of any such changes. All references to “Section,” “Sec.,” or “§” refer to the Internal Revenue Code of 1986, as amended.