The brand new Excepted Profit HRA (EBHRA) is a superb profit for employers seeking to construct a complete advantages bundle. It affords workers flexibility in how they spend their healthcare {dollars}. Probably the most continuously requested questions on EBHRA are compiled beneath. 

EBHRA FAQ

The highest questions we hear concerning the new Excepted Profit HRA.

What’s an EBHRA?

An EBHRA stands for Excepted Profit HRA. It’s a tax-advantaged well being reimbursement association that pays premiums and associated bills for excepted advantages like dental and imaginative and prescient protection. It is provided alongside a gaggle plan. An worker can take part even when they refuse participation within the employer’s group well being plan. In a nutshell, it permits employers to assist their workers with well being care bills that are not lined by insurance coverage.

What does EBHRA stand for?

EBHRA stands for Excepted Profit Well being Reimbursement Association. 

What are the advantages of providing an EBHRA?

There are some cases during which an employer could want to supply an HRA along with the normal group well being plan, for instance to cowl the price of copays, deductibles, or different prices not lined by the plan. Excepted Profit HRA’s permit for larger ranges of employer contributions than versatile spending preparations (FSAs) and the unused funds can rollover yr to yr. 

What are the necessities for EBHRA?

To maintain the HRA restricted to excepted advantages, the principles state that EBHRA:

• Should not be an integral a part of the group well being plan
• Advantages should be restricted in quantity
• Can not present reimbursement for premiums for sure medical insurance protection
• Be made out there below the identical phrases to all comparable located workers

What are the utmost contribution charges for EBHRA?

The utmost contribution charge for 2020, 2021, and 2022 was $1,800.

For 2023, that most contribution charge for EBHRAs charge has gone as much as $1,950. 

Sooner or later, this charge is anticipated to regulate with inflation however to this point the previous three years have had the identical quantity.

What’s eligible for reimbursement with an EBHRA?

• Restricted scope dental and imaginative and prescient insurance coverage;
• COBRA continuation protection;
• Brief-term restricted period insurance coverage (STDLI);
• Price sharing (copays and deductible); and,
• Lengthy-term care protection, nursing dwelling care, dwelling healthcare, community-based care, or any mixture thereof.

What isn’t eligible for reimbursement below EBHRA?

The Excepted Profit HRA could not reimburse premiums that aren’t thought of excepted advantages together with:

• Medicare half A, B, C or D
• Particular person Medical insurance protection
• Group plan premiums (besides COBRA)

Are workers required to enroll within the employer provided group well being plan to take part in EBHRA?

No, workers don’t have to just accept the employer sponsored group well being plan so as to take part in EBHRA. That is nice information for workers who won’t have the ability to afford the premiums below their group plan, as they are going to have the ability to buy a short-term plan as a substitute and use their EBHRA allowance to reimburse the premium. 

What occurs to unused funds at yr finish?

Employers have the choice of designing EBHRA to permit unused funds to hold over yr over yr. The carryover quantities is not going to be included when figuring out if the next yr’s restrict is exceeded. 

Can workers have each an EBHRA + HSA?

Sure, workers can contribute to an HSA  and take part in EBHRA. Staff should guarantee their well being protection is appropriate with the HSA to take part. 

When can employers begin providing EBHRA?

Employers have been capable of begin providing Excepted Profit HRAs on January 1, 2020. 

About Take Command  

Take Command is a acknowledged leader in QSEHRA administration and small enterprise HRA tax technique. We’re additionally the primary and solely ICHRA administrator to supply in-house, hands-on worker help. Our workforce is enthusiastic about HRAs and the affect they will have on companies of all sizes. 

This put up was initially printed in 2019 and has been up to date in 2023 to mirrored the newest regulatory and coverage updates.