Final Regulations Could Expand the Use of Health Reimbursement Arrangements (Journal Article)

Effective January 1, 2020, under final regulations issued by three government departments, employers can offer two new forms of health reimbursement arrangements (HRAs) to employees. As long as certain requirements are satisfied, the final regulations allow employers to offer an individual coverage HRA which allows HRAs to pay premiums for individual medical insurance coverage purchased by the employee on a tax-advantaged basis. This also shifts the risk of premium increases to the employee. In addition, employers can offer another form of HRA that is allowed to purchase excepted benefits. This could be a significant development for small- and mid-sized employers regardless of whether they presently offer medical care insurance coverage.

Author: Paul J. Schneider, JD, LLM, is senior counsel to Paisner~Litvin, LLP, Bala Cynwyd, Pennsylvania, where he advises clients on taxation employee benefit matters. He is a charter fellow of the American College of Employee Benefits Counsel and has served as chairman of the Important Developments Subcommittee of the American Bar Association Tax Section’s Employee Benefits Committee. Mr. Schneider is also a member of the board of editors of the Journal of Taxation.

Mr. Schneider is a graduate of Lehigh University, Columbia University School of Law (JD), New York University (LLM in Taxation), and LaSalle University (MBA). Mr. Schneider frequently writes articles and lectures on tax and employee benefits–related topics, and was coeditor of ERISA: A Comprehensive Guide, 4th Edition (Aspen, 2011).

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