Posts Tagged ‘health reimbursement arrangements’

Update on MSP Reporting Requirements for HRAs

September 29, 2011

Yesterday CMS published an alert notifying group health plans that it is changing the Medicare Secondary Payer  reporting requirements for HRAs by increasing the threshhold at which an HRA is required to participate in MSP reporting from $1,000 to $5,000.  HRA coverage that reflects a benefit of less than $5,000 per year (including any roll-over contributions from the previous year) will not be required to report MSP data effective with the start of the HRA’s first plan year on or after October 3, 2011.   While this is good news for HRA sponsors with lower threshholds, HRA sponsors should note that the reporting exemption does not mean that HRAs with annual benefits of less than $5,000 are exempt from the general MSP payment policies and it will not change the primary payer status of the HRA coverage. 

The alert also notifies HRAs required to participate in MSP reporting of a new reporting requirement.  A notice of termination must be submitted when an insured has exhausted his/her HRA balance and no additional funds will be added for the remainder of the coverage year.

A copy of the alert can be accessed at http://www.cms.gov/MandatoryInsRep/Downloads/HRACoverage.pdf

HRAs & Annual Limit Restrictions

August 24, 2011

Health reimbursement arrangements (“HRAs”) in effect prior to September 23, 2010 no longer need to apply to HHS for a waiver of the annual limit restrictions in the Affordable Care Act.  Under the Act, group health plans, including HRAs, are subject to annual limit restrictions on essential health benefits until 2014.  Beginning in 2014,  annual limits on essential health benefits are prohibited.  In previous guidance, HHS clarified that an HRA integrated with an underlying medical plan (for example, an HRA subsidizing deductibles or out of pocket maximums imposed by an employer’s major medical plan) complies with the annual limit restrictions if the underlying medical plan complies.  However, stand-alone HRAs (for example, HRAs that reimburse employees directly for insurance premiums or medical expenses) were not addressed and presumably have to comply with the annual limit restrictions.  Until 2014, HHS has allowed plans who by their nature cannot comply with the annual limit restrictions (mini-med plans, HRAs, etc.) to apply for an annual waiver of the restrictions provided the plan was in place prior to September 23, 2010.   In guidance released on Friday, HHS exempts HRAs from the waiver application process, recognizing that by their nature HRAs  have annual limit restrictions far below those required by the Act.  A copy of the guidance is available at http://cciio.cms.gov/resources/files/final_hra_guidance_20110819.pdf   In light of this guidance, stand-alone HRAs no longer need to apply for an annual waiver to be exempt from the annual limit restrictions provided the stand-alone HRA was in effect prior to September 23, 2010.    The new exemption applies only until 2014 at which time the waiver program will end.  HHS will need to issue further guidance on how HRAs will be treated in 2014 when annual limits are no longer allowed on essential health benefits.


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