Human Resources

The Washington Report

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October 31, 2018


Departments Issue Proposed Regulations on HRAs and Other Account-Based Group Health Plans

On October 23, 2018, the Departments of Health and Human Services, Treasury, and Labor (Departments) issued proposed regulations that expand the usability of health reimbursement arrangements (HRAs). The proposed regulations allow integrating HRAs (and other account-based group health plans, unless indicated otherwise in the regulations) with individual health insurance coverage if certain conditions are met. The proposed regulations also set forth conditions under which certain HRAs would be recognized as limited excepted benefits. Also, the Treasury and the Internal Revenue Service propose regulations regarding premium tax credit eligibility for individuals offered coverage under an HRA integrated with individual health insurance coverage. In addition, the Department of Labor proposes a clarification to provide plan sponsors with assurance that the individual health insurance coverage, the premiums of which are reimbursed by an HRA or a qualified small employer health reimbursement arrangement (QSEHRA), does not become part of an ERISA plan, provided certain conditions are met. Finally, the Department of Health and Human Services proposes regulations that would provide a special enrollment period in the individual market for individuals who gain access to an HRA integrated with individual health insurance coverage, or who are provided a QSEHRA.

The proposed regulations would affect employees and their family members; employers, employee organizations, and other plan sponsors; group health plans; health insurance issuers; and purchasers of individual health insurance coverage. Comments on the proposed regulations are due no later than December 28, 2018.

For details on the proposed regulations, please see Employees Could Use HRAs to Buy Individual Health Insurance Policies Under Proposed Rules in the Publications section.

The proposed regulations are available here.

The news release is available here.

A fact sheet is available here.

Departments Issue Guidance on State Relief and Empowerment Waivers
On October 22, 2018, the Departments of Health and Human Services and the Treasury (Departments) released guidance related to Section 1332 of the Affordable Care Act (ACA) and its implementing regulations. Specifically, the guidance provides information about the requirements that must be met for the approval of these waivers, including the Secretaries' application review procedures, the calculation of pass-through funding, certain analytical requirements, and operational considerations. This new guidance replaces the guidance related to Section 1332 of the ACA that was previously published on December 16, 2015.

According to the news release: “The new guidance grants states more flexibility to design alternatives to the ACA…Under this new policy, states will be able to pursue waivers to improve their insurance markets, increase affordable coverage options for their residents, and ensure that people with pre-existing conditions are protected. These waivers are called State Relief and Empowerment Waivers to reflect this new direction and opportunity.” The Departments stated that they intend to release waiver concepts in the near future to give examples of how states can “take advantage of waivers and to spur further state innovations.” The guidance became applicable on October 22, 2018. Comments must be submitted no later than December 24, 2018.

The news release is available here.

The guidance is available here.

A fact sheet is available here.


EBSA Releases Proposed Regulation on Definition of “Employer” Under Section 3(5) of ERISA – Association Retirement Plans and Other Multiple-Employer Plans

On October 22, 2018, the Department of Labor's Employee Benefits Security Administration (EBSA) released a proposed regulation meant to expand access to affordable quality retirement saving options. The proposed rule would clarify the circumstances under which an employer group or association or a professional employer organization (PEO) can be considered an “employer” and sponsor a workplace retirement plan for its members or client employers. Such plans would generally be considered Multiple-Employer Plans, or “MEPs.”

The proposed regulation would allow different businesses to join a MEP, either through a group or association or through a PEO. The proposal would also permit certain working owners without employees to participate in a MEP sponsored by a group or association. Comments on the proposed regulation are due no later than December 24, 2018.

The proposed regulation is available here.

The news release is available here.

Other HR/Employment?

Draft Form 8994 on Employer-Provided Family and Medical Leave Credit Issued

On October 26, 2018, the Internal Revenue Service (IRS) released a draft of the 2018 Form 8994, Employer Credit for Paid Family and Medical Leave, and instructions. The form would be used to figure the employer credit for paid family and medical leave for tax years beginning after 2017. The credit ranges from 12.5% to 25% of certain wages paid to a qualifying employee during the leave.

Draft Form 8994 and its instructions are available here.

Aon Publications

Employees Could Use HRAs to Buy Individual Health Insurance Policies Under Proposed Rules

The Trump Administration has proposed regulations that, if finalized in their current form, would expand the use of employer-sponsored health reimbursement arrangements (HRAs) to permit employees to use HRAs to purchase individual health insurance policies, including policies sold on the Affordable Care Act’s (ACA) health insurance Exchanges. In addition, stand-alone HRAs would be permissible in limited circumstances. The proposed regulations, if finalized, would be effective in plan years beginning after 2019.

The proposed regulations are the third set of regulations issued under an Executive Order signed by President Trump last year. Two previous sets of regulations, on short-term limited-duration health insurance policies and association health plans, were finalized earlier this year.

The Aon bulletin, which provides an overview of the proposed regulations, can be found here.

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