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Qualified Small Employer Health Reimbursement Arrangement (QSEHRA)

Allowable as of January 1, 2017, under the 21st Century Cures Act (enacted in December 2016). Considered a “Standalone HRA” which hasn’t been allowable since 1/1/14 under the ACA. While the Plan is subject to the general provisions of ERISA applicable to welfare benefit plans (including the Plan document and SPD requirement), it is not a “group health plan” for the purposes of the Code, ERISA, COBRA, HIPAA and the ACA.

  • Who is eligible for the new QSEHRA?
    • Small Employer – Employers with less than 50 full-time employees
    • No Health Plan – The Employer must not offer a group health plan to any of its employees.
    • Eligible Employees – All full-time employees must be eligible for the plan.
  • What are the benefits of a QSEHRA?
    • The QSEHRA can provide reimbursement for individual health insurance policy premiums as well as out-of-pocket medical expenses (same expenses as FSA eligible). Medicare premiums may also be reimbursed; however, it’s unclear how the Medicare Secondary Payer Rules will affect reimbursements for Medicare premiums for employers with over 20 employees.
  • What are maximum reimbursement levels under QSEHRA starting 1/1/18?
    • $5,050 for employee only coverage or
    • $10,2500 for family coverage
    • Amounts are prorated for partial year coverage and indexed for future years.
  • Are carryovers allowable?
    • It doesn’t appear that a QSEHRA is prevented from having a carryover. However, there is a rule that not more than the limits above (adjusted for future cost of living adjustments) can be reimbursed for the year. If the employer funded a smaller amount and allowed for a carryover, that could potentially work.
  • Can amounts be accrued on a monthly basis vs. a flat annual allocation?
    • There doesn’t appear to be anything in the QSEHRA legislation and guidance which would prevent the employer from crediting/making available the annual allocation on a pro rata installment basis.  In other words, same rules as traditional HRA.
  • What are Employer requirements?
    • A QSEHRA must be offered to all eligible employees on the same terms.
  • What employees can be excluded?
    • Less than 90 days of service with the company
    • Under age 25
    • Part-time or seasonal employee
    • Union employees
  • Can an Employer exclude an employee who is covered under a spouse’s employer’s group medical plan?
    • A QSEHRA allows for a broad definition of eligible expenses for reimbursement purposes, but permits an employer from designing its plan to use a smaller subset. It doesn’t appear that an employer would be prohibited from adding this type of restriction. However, it must be done on a uniform basis for all similarly situated employees.
  • What are Employee requirements?
    • Employees must maintain minimal essential coverage under an individual policy (directly through a carrier or through Exchange)
  • Would the QSEHRA preclude covered employees from receiving a subsidy on the Exchange?
    • The QSEHRA benefit doesn’t preclude premium tax credit eligibility.  However, it operates as an offset to reduce the amount of the premium tax credit (no subsidy is likely)
  • What are written notice requirements by Employer?
    • 90 days prior to beginning the Plan Year
    • Spells out the amount of benefit available for upcoming Plan Year
    • Employee is required to notify the Exchange of the QSEHRA if they apply for a subsidy
    • Tax consequences of not having minimal essential coverage
  • Are there any other Employer requirements?
    • Employer must obtain “proof of coverage” before reimbursing any expenses
    • Available QSEHRA benefits must be reported on the employee’s W-2 in new Box 12 (not taxable in Box 1 of W-2)
    • QSEHRA is exempt from COBRA
    • Plan document and SPD are required (SBC is not required)

Questions? Contact Arcadia Benefits Group!

By |2019-02-11T16:26:52+00:00January 17th, 2018|Categories: Benefits News|Comments Off on Qualified Small Employer Health Reimbursement Arrangement (QSEHRA)

IRS Announces Increase in Mileage Rate for Transportation to Obtain Medicare Care

The IRS has announced that the standard mileage rate for use of an automobile to obtain medical care will increase slightly from 17 cents per mile to 18 cents per mile for medical care expenses incurred on or after January 1, 2018.

In determining the amount of appropriate mileage for reimbursement, the participant must submit the following detail for mileage:

  • Date of travel/service (1/5/18);
  • Reason (Dr’s appt, PT, surgery);
  • From/to locations (Work location to provider & back to work or home);
  • # of miles (round trip).

Arcadia will also require an internet-based confirmation of miles, such as Map Quest, Google or Bing (as well as a claim form with accompanying documentation of the expense, i.e., office visit co-pay receipt or a copy of the Explanation of Benefits from the insurance carrier). Related parking fees and tolls may be submitted as separate items.

By |2019-02-11T16:26:52+00:00January 17th, 2018|Categories: Benefits News|Comments Off on IRS Announces Increase in Mileage Rate for Transportation to Obtain Medicare Care

2018 Cost-of-Living Adjustments for Health Savings Accounts (HSAs)

The IRS has announced the inflation-adjusted limits for HSAs and high deductible health plans for 2018:

  • $3,450 for self-only coverage (increase of $50 from 2017) and
  • $6,900 for family coverage (increase of $150 from 2017).

The catch-up contribution limit (for individuals who are 55 or older) remains at $1,000.

The required minimum annual deductible for 2018 are $1,300 for self-only HDHP coverage and $2,600 for family HDHP coverage.

Maximum out-of-pocket expense limits for 2018 will increase from 2017 to $6,650 for self-only coverage and $13,300 for family coverage).

By |2019-02-11T16:26:52+00:00January 17th, 2018|Categories: Benefits News|Comments Off on 2018 Cost-of-Living Adjustments for Health Savings Accounts (HSAs)
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