Good News for Employers Who Sponsor HRAs!

Final ACA Instructions Provide Reporting Relief to HRAs Integrated with Health Plans.


The Final Instructions for ACA reporting forms 1094-B and 1095-B were issued yesterday, and provide clarification and relief to employers who sponsor a Health Reimbursement Arrangement (HRA).



The rules seemed to keep changing about HRA reporting, adding even more complexity to a reporting obligation that was already cumbersome and confusing to employers. Sort of a good news, bad news, good news situation:


  • Code Section §6055 requires an entity that provides “minimum essential coverage” (MEC) to report such coverage by submission of form 1094 or 1095. The carrier is responsible for MEC reporting for fully-insured plans. For self-funded plans (like an HRA), the obligation is generally with the employer/plan sponsor. The final Code § 6055 regulations contained an exception where “no reporting is required for minimum essential coverage that provides benefits in addition or as a supplement to a health plan or arrangement” but only “if the primary and supplemental coverages have the same plan sponsor” or the “coverage supplements government-sponsored coverage” (e.g., Medicare). Good news– no ACA reporting for HRAs!


  • Then, the draft 2015 Instructions for Forms 1094-B and 1095-B released in early August contradicted the prior Code § 6055 regulations about reporting for HRAs. Those draft instructions essentially said that an employer that maintains an insured group plan and a self-funded Health Reimbursement Arrangement (HRA) must separately report the HRA coverage. Bad news for employers.


  • The Final Instructions for forms 1094-B and 1095-B removed the MEC Reporting obligation for employers who sponsor HRAs that are integrated with either fully insured or self-funded coverage sponsored by that employer. “An employer with an insured major medical plan and HRA coverage for which an individual is eligible because the individual enrolls in the insured major medical plan is not required to report the coverage under the HRA for an individual covered by both arrangements.” Good News.


Arrangements that are integrated with OTHER employer coverage or which are not integrated with ANY employer coverage apparently will still be required to report.



For more information, see page 3 of the Final Instructions linked here: Instructions for 1094-B and 1095-B.