The 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.
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