2 HRA changes Coming in 2020. Will They Affect You?

With the current health reimbursement arrangements, the new HRA changes might be welcomed, especially if you’re saving money this year. It can be hard to keep your employees covered, especially for small businesses with fewer options. Some good news is on the horizon.  In June 2019, government officials decided that employers can offer two different health reimbursement arrangements (HRA) to their employees. These new options alleviate the stress previous IRS restrictions had on the coverage type. With the current administration’s push for health insurance change, we should see results after their start in January 2020. Thinking about starting a HRA for your employee’s? Read about the current status first before you decide on the right time. 

medical appointment book plus stethoscope and pen
Keeping an HRA was something of a challenge. Hopefully, in 2020, this will be a better option for people.

What Is a HRA?

For business owners, a health reimbursement arrangement/account is a benefit for employees. If employees are to pay a medical expense out-of-pocket, then the account assists them during this time. It is advantageous for the employer because of the tax benefits. In addition, the company pays for it.  It works by setting up a limit for each account. The employee may incur medical expenses, then be reimbursed from the company account up to this limit. This is not health insurance, but instead an option for the smaller business that cannot afford Group Health.

What Is It Like Now?

Presently, employers pay into these accounts as an added benefit for employees. Then, employees can withdraw for their expenses. However, the HRAs annual limits can be broken, violating stipulations put in by the Affordable Care Act. This has caused frustration between companies and the IRS as HRAs had strict guidelines separating them from other forms of health insurance.

What HRA Changes Will Look Like

The Trump administration’s proposed shifts should alleviate these prior concerns using integration into health insurance plans. This means expansion of what an HRA can do and their definitions are. In 2020, the HRAs used alongside non-group health insurance have two new names:

business owner talking to a doctor about an HRA
Change is usually a good thing. What can you look forward to next year with your new HRA?

Excepted-benefits HRAs (EBHRAs) – These are used specifically to reimburse “excepted” benefits. For example, they might help with dental. Look for this is you are wanting more coverage in outlier benefits.

 

Individual-coverage HRAs (ICHRAs) – These HRAs, like their name says, are combined with an individual’s health insurance. 

 

These changes can be a positive force for small business owners that are looking for solutions to keep their employees covered.

 If you are looking to get more coverage for your company, EZ.Insure offers solutions. Your agent will answer any questions you have, compare the plans available to you, and even sign you up when you are ready, free of charge. To get started simply enter your zip code in the bar above, or you can speak to an agent by emailing replies@ez.insure, or calling 888-998-2027. EZ.Insure makes the entire process simple, easy, and quick.

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