Labor rejects cash-for-coverage strategies

Because the stand-alone HRA would be a group health plan, it would have to offer the basic preventive services benefits package required by PPACA, without imposing cost-sharing requirements on the workers, even if the workers used their HRA money to buy individual policies that also covered the preventive services package.

An employer could use a standalone HRA to provide fixed amounts of cash that early retirees could use to buy individual coverage, but the early retirees would be ineligible for the new PPACA premium tax credit subsidies, officials said.

EBSA says the other agencies implementing PPACA — the Internal Revenue Service and the U.S. Department of Health and Human Services — will be releasing similar guidance.

Elsewhere in the guidance, officials said employee assistance programs that do not offer significant medical care benefits are exempt from the annual benefits limit ban.

Employers can still offer HRAs with limited annual benefits if the HRAs are integrated with group major medical plans, and the major medical-HRA package provides coverage without an annual benefits limit.

See also:

• IBM, Time Warner to make retiree health shift
• Shifting workers to exchanges
• Will defined contribution health plans get to waltz?