Park City, Utah (PRWEB) April 27, 2013
Today, Zane Benefits, Inc. published new information on Health Reimbursement Account requirements. Zane Benefits, which provides comprehensive and flexible alternatives to traditional employer sponsored health benefits, is the leader in defined contribution and health reimbursement arrangements.
According to Zane Benefits’ website, Health Reimbursement Accounts (HRAs) are Section 105 medical reimbursement plans paid for by an employer to reimburse the medical expenses of employees, their spouses, and dependents. HRAs are designed to give employees more choice and greater control over their health care coverage, and save money for both the employer and employees.
HRA Plan Rules
According to Zane Benefits’ website, the Internal Revenue Service (IRS) defines the rules and guidelines for an HRA in IRS Notice 2002-45. Under these rules:
Reimbursements are generally excludable from the employee's gross income under Internal Revenue Code Sections 106 and 105.
HRA Plan Requirements: Compliance
According to Zane Benefits’ website, to offer an HRA, a company is required to be compliant in the following areas:
1. IRS Compliance: The IRS requires that a formal HRA (with IRS-compliant HRA Plan Documents) be established in order for reimbursements to be tax-free for the employer, and employees.
2. Federal Compliance: A company must have measures and safeguards in place to meet HIPAA and ERISA regulations.
HIPAA (Medical Privacy): An HRA is a self-funded health plan and governed by the HIPAA Privacy Rules. In order to administer an HRA, the entity processing the claims receives protected health information (PHI) which is protected by HIPAA. Employers that do not comply can be subject to civil penalties of up to $100 per violation. Learn more about HIPAA Privacy for HRAs.
ERISA: The U.S. federal government has specific regulations that employers must comply with in order to reimburse employees for individual health insurance premiums without triggering ERISA plan status for the individual health insurance policies. Learn more about ERISA compliant individual policy reimbursement.
3. ACA/Health Care Reform: The Affordable Care Act (ACA) introduced new requirements for HRAs including how benefit information is presented to employees (Summary of Benefits & Coverage, or SBC), new reporting forms (720/5500) and new plan design requirements (ex: annual limits). The HRA plan must have the appropriate documents, data and plan settings in place to be ACA compliant.
HRA Plan Requirements: Plan Documents
According to Zane Benefits’ website, HRA Plan Documents must be in place and comply with the above IRS and ERISA rules. Since an HRA is subject to ERISA, a legal HRA plan document must be provided in writing. A Summary of Benefits is not considered an HRA Plan Document or HRA Summary Plan Description (SPD). If an HRA exists without a written HRA Plan Document the HRA is out of compliance.
An HRA Plan Document should contain the following:
About Zane Benefits
Zane Benefits was founded in 2006 to provide a revolutionized SaaS (Software-as-a-Service) administration platform ("ZaneHRA") for Health Reimbursement Arrangements (HRAs) and defined contribution health care. The flagship software provides a 100% paperless administration experience to employers and insurance professionals that want to offer better health benefits without a traditional group health insurance plan at lower costs. For more information about ZaneHRA, visit http://www.zanebenefits.com.