Zane Benefits Publishes New Information on New Guidance and HRPs

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How a Healthcare Reimbursement Plan (HRP) works with the new market reforms

Today, Zane Benefits, the number one online small business health benefits solution, published new information on new guidance and HRPs.

According to Zane Benefits’ website, section 105 medical reimbursement plans are a popular alternative to group health insurance for small businesses and nonprofits. One type of Section 105 medical reimbursement plan is a Health Reimbursement Arrangement (aka HRA or Health Reimbursement Account). However, new guidance limits the ability of certain HRAs to exist on a stand-alone basis starting January 1st, 2014.

The preventive and annual limit rules do not affect the ability for a Section 105 medical reimbursement plan to reimburse individual health insurance premiums tax-free. Premium reimbursement is still allowed under the tax code via Section 105(b). However, starting January 1st, 2014, medical reimbursement plans must be designed to comply with PHS Act 2711 and 2713.

Healthcare Reimbursement Plans (or HRPs) are one possible alternative to HRAs. An HRP is a type of Section 105 self-insured medical reimbursement plan designed to reimburse employees for individual health insurance premiums tax-free. If structured correctly, an HRP can comply with PHS Act 2711 and PHS Act 2713.

PHS Act 2713 requires the HRP to cover basic preventive care services without cost-sharing. The HRP meets this requirement.

PHS Act 2711 states that no annual or lifetime limits may be placed on essential health benefits. As a result, the HRP may not place an annual limit on the basic preventive care expenses required by PHS Act 2713. Separately, PHS Act 2711 states that annual limits and lifetime limits may be placed on benefits that are not essential health benefits. Since health insurance premiums are not essential health benefits, the HRP may place a “premium-specific” annual limit on premium reimbursements.

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About Zane Benefits
Zane Benefits was founded in 2006 to provide a revolutionized SaaS (Software-as-a-Service) administration platform ("ZaneHRA") for defined contribution health care. The flagship software provides a 100% paperless administration experience to small businesses and insurance professionals that want to offer better health benefits without a traditional group health insurance plan at lower costs. For more information about Zane Benefits, visit http://www.zanebenefits.com.

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Christina Merhar
Zane Benefits
800-391-9209 6725
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