Hra compliance 101 (jan. 2020)
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Join us for an inside look at the health reimbursement arrangement (HRA) and how it works. In this webinar, we cover the basics of HRA compliance, what you need to know before offering an HRA, and how PeopleKeep's software helps along the way. Our hosts are HRA compliance experts Nick Green and Jon Gelwix.
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Hra compliance 101 (jan. 2020)
- 1. Agenda 2 Plan setup - Plan documents - ERISA - COBRA - Affordable Care Act (ACA) 1 Employee communication - Notice requirements - Opt-in and opt-out - Premium tax credits - Employee eligibility 3 Documentation - Expense eligibility - Employee submission - HIPAA - Document storage 4 Tax reporting - W-2 requirements 5 Q&A
- 2. Health Reimbursement Arrangements Qualified Small Employer HRA and Individual Coverage HRA ● Not considered a group health plan ● Available exclusively to businesses with fewer than 50 employees ● Businesses cannot offer a group medical, dental, or vision plan QSEHRA ● Considered a group health plan ● Available to businesses of all sizes ● Business can offer a group health insurance plan, but employees can’t have a choice between group and the ICHRA ICHRA
- 3. Part I: Plan setup
- 4. Plan documents Part I: Plan setup Plan documents define what expenses are eligible for reimbursement, the amount of employer contribution, and other required details about the reimbursement plan.
- 5. Legal documents Part I: Plan setup How the plan complies with ERISA, COBRA, and HIPAA.
- 6. Summary plan description Part I: Plan setup Employee-facing breakdown of what expenses are eligible and how to access their HRA benefit.
- 7. Plan documents Three options for document preparation Lawyer/CPA Administration Software Yourself
- 8. Employee Retirement Income Security Act (ERISA) - Summary Plan Description - informing employees - Cannot endorse specific insurance policies - Cannot pay directly for insurance policies Part I: Plan setup
- 9. Consolidated Omnibus Budget Reconciliation Act (COBRA) - Applies to employers with more than 20 participants offering group health plans - Must offer continued participation in group health insurance plans for a period after termination - Does not apply to QSEHRA, however, it does apply to ICHRA for employers with more than 20 participants Part I: Plan setup
- 10. Affordable Care Act (ACA) - Tax credits - Employer mandate Part I: Plan setup
- 11. Types of reimbursable policies - Plans that offer minimum essential coverage are tax-free - Plans that do not offer minimum essential coverage are tax-advantaged Part I: Plan setup
- 12. Non-discrimination a. HRA must comply with IRS non-discrimination rules b. Must not discriminate in favor of highly compensated individuals (HCIs) c. QSEHRA allows compensation based on family status d. ICHRA allows compensation based on employee classes Part I: Plan setup
- 13. ICHRA (Individual Coverage HRA) Non-discrimination Allowance amounts by employee type QSEHRA (Qualified Small Employer HRA) 1. Full time 2. Part time 3. Seasonal 4. State of residence 5. Salaried 6. Hourly 7. Combination 1. Single 2. Single with dependents 3. Married 4. Married with dependents
- 14. Part II: Employee communication
- 15. Notice requirement Part II: Employee communication - Business owners are obligated to inform employees of the benefit - Think of HRAs as a retention tool - Varies by type of HRA you offer
- 16. Opt-in & opt-out Part II: Employee communication - Only applicable to the ICHRA - Employees must decide to opt in or out of the benefit by the date the plan begins
- 17. Premium tax credits Part II: Employee communication - QSEHRA requires coordination - ICHRA requires opt-in or out
- 18. Employee eligibility Part II: Employee communication Do these affect eligibility? - HSA - Group health insurance - Owner eligibility
- 20. To be eligible for reimbursement, expenses must be listed under the IRS Publication 502 regulations. The documentation must include: ● The service or product ● The date of the service or sale ● The amount incurred Part III: Documentation
- 22. Fulfilling reimbursements Part III: Documentation - Employers should establish window of time for reimbursements - Reimbursements are usually administered through payroll or a separate check
- 23. Health Insurance Portability and Accountability Act (HIPAA) a. Confidentiality b. Protected Health Information (PHI) c. Documentation Part III: Documentation
- 24. Keeping documents confidential - Employers must certify employees’ health information is protected - Cannot use health info for employment-related actions Storing documents - IRS requires employers to keep all documents for 7 years, minimum Part III: Documentation
- 25. Document storage Three options for document storage Digital Administration Software Filing Cabinet
- 26. Part IV: Tax reporting
- 27. W-2 requirements Part IV: Tax reporting The company must report - 100% of offered allowance - Any over-reimbursements and reimbursements to employees without MEC
- 28. Thank you for attending today’s webinar! The webinar slides and recording will be shared with everyone tomorrow