HRAs receive exemption from annual limit restrictions in health reform

Health reimbursement arrangements (HRAs) have been exempted from the annual limit restrictions in the Patient Protection and Affordable Care Act and do not need to apply individually for waivers or waiver extensions from the restrictions, according to August 19, 2011, guidance from the Center for Consumer Information & Insurance Oversight (CCIIO).

In June, CCIIO announced that limited benefit plans have until September 22, 2011, to apply for or renew a temporary waiver from the annual limit restrictions. The CCIIO already has granted waivers to more than 1,500 plans.

In the most recent guidance, CCIIO notes that "all HRAs set limits on the amount that can be spent and, we believe, those limits would always be less than the applicable restricted annual limit amounts. Accordingly, applying the restrictions on annual limits ... to HRAs would result in a significant decrease in access to HRA benefits. Therefore, this guidance exempts as a class all HRAs that are subject to the requirements of [ACA Sec. 2711] and that were in effect prior to September 23, 2010 from having to apply individually for an annual limit waiver for plan years beginning on or after September 23, 2010 but before January 1, 2014."

If an employer that maintains an HRA also maintains other coverage, whether or not that coverage is integrated with the HRA, that other coverage must meet the annual limit requirements or obtain a waiver.

An HRA that is exempt from applying for an annual limit waiver still must comply with the record retention and Annual Notice requirements to participants and subscribers set forth in the supplemental guidance issued June. For instructions on these requirements for HRAs, please refer to the "Technical Instructions for the Waiver Extension and Waiver Application Process."

Waivers granted. By the end of July, the Center for Consumer Information and Insurance Oversight (CCIIO) had provided 1,472 one-year waivers and 106 three-year waivers to organizations covering more than 3.4 million employees. By the end of June, 1,471 plans had received waivers.

By type of applicant, the waivers granted so far are, as follows:

• self-insured employers (631);


• health reimbursement arrangements (491);


• multi-employer plans (378);


• health insurance issuers (41);


• non-Taft Hartley union plans (30);


• state-mandated policies (5); and


• association plans (2).

For more information. A comprehensive analysis of the Patient Protection and Affordable Care Act, including the full text of the law and additional information on health reform implementation and other recent developments in employee benefits, just click here.