An excepted benefit Health Reimbursement Arrangement (HRA) allows employers to finance additional medical care, like vision or dental coverage, coinsurance and copayments for individual health insurance coverage, short-term limited-duration insurance, or other health care costs not covered by their primary group plan. Excepted benefit HRAs cannot be used to reimburse individual health insurance coverage premiums, group health plans premiums (other than COBRA or other group continuation coverage), or Medicare premiums. However, an excepted benefit HRA can be used to reimburse premiums for individual health insurance coverage or group health plan coverage that consists solely of excepted benefits. This type of HRA, like the individual coverage HRA, allows rollover of unused amounts from year to year.

The annual contribution for an excepted benefit HRA must be limited to $1,800 per year (adjusted yearly for inflation). An excepted benefit HRA must be offered with a traditional group health plan, although employees aren’t required to enroll in the traditional group health plan.

Have any questions or concerns regarding this notice? Don’t hesitate to contact your Total Benefit Solutions health insurance specialists at (215)355-2121.