Recently, I wrote about changes in health care benefits as a result of the Affordable Care Act (ACA). Many churches also reimburse or pay directly for out-of-pocket (oop) medical expenses such as prescriptions, co-pays, dental, etc. Under the ACA, these types of arrangements (also known as a health reimbursement arrangement or HRA) must also comply with the new rules concerning health care insurance.
In order to have a qualifying HRA plan, you will need to have a plan document prepared, along with a summary plan description which must be given to every employee that qualifies to participate. The plan document must be written specifically for the underlying ACA compliant health care insurance provided. Stand-alone HRA’s are no longer allowed. The new HRA is also referred to as an “integrated HRA.”
Also, only eligible expenses can be reimbursed. Over-the-counter medicines are only eligible if prescribed by a doctor in writing.
Failure to follow the new rules can subject the employer to the same $100 per day penalty for not having an ACA-compliant health insurance plan.
This is only a brief summary of a complex topic with many new rules and changes. Please contact us or an attorney who specializes in employee benefits for additional information.