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HRA Requirements and Healthcare Reform

Health care reform prohibits an annual limit on HRAs unless the participant is enrolled in a major medical health plan that adheres to the prohibition on annual limits.  The only way to provide the full benefits of a comprehensive HRA is to require that the participant be enrolled in a major medical health plan if they want the full benefit.  Otherwise, they can only receive reimbursement of dental, vision, and eligible insurance premiums.  Unless you would like to change your HRA to an unlimited benefit.

For plan years starting between September 23, 2010 and September 22, 2011, plans may not limit annual coverage of essential benefits such as hospital, physician and pharmacy benefits to less than $750,000.  The restricted annual limit will be $1.25 million for plan years starting on or after September 23, 2011, and $2 million for plan years starting between September 23, 2012 and January 1, 2014.  However, beginning in 2014, for employers with more than one employee, restricted annual dollar limits are not permitted.

Comprehensive HRAs that were effective after September 22, 2010

In an effort to provide a way for people to compare their insurance options in a set format, industry-wide, the Health care reform laws require that the Plan Sponsor (the Employer) provide each Employee with a Summary of Benefits and Coverage (SBC).  We argue that there would be no reason for anyone to compare their HRA benefit to an insurance option, since they can use both and do not pay a premium for their HRA benefit.  But, so far, legislation has not excluded HRAs from this requirement.

It seems that the HRAs have gotten caught up in rules intended for group health insurance plans, without guidance given to employers with HRAs and without specific instructions regarding how to complete the SBC template for an HRA.  This makes it difficult to comply with the requirement, but, it is understood that HRAs must comply.

Hopefully, HRAs will be excluded from this requirement before too long.  Please make an effort to follow the directions given to complete the SBC. We recommend that you notify the Department of Health and Human Services and the Department of Labor with any questions and concerns that you may have.

Most HRAs will require a Summary of Benefits and Coverage.  The only HRAs that are excluded from this SBC requirement are those HRAs that only reimburse insurance premiums, dental expenses, and/or vision expenses.  Employers with only one employee are not required to provide a Summary of Benefits and Coverage.

The instructions below can be used for printing the SBC Instructions and Template.

Go to

•  Instructions for Completing the SBC – Group Health Plan Coverage  (which is under the heading “Templates, Instructions, and Related Materials”)

Read through the instructions completely.  Then download “Corrected Summary of Benefits and Coverage (SBC) Template [MS Word Format]“  and answer all questions to the best of your ability.

After reading all instructions, try to answer all questions, if you want further clarification, you can either email or call the contact information given at the end of the instructions: (866-444-EBSA) or .

Make sure that your email provides a “read receipt” before you send the email.  When you receive the read receipt, print it along with the email that was sent and place it with your HRA Plan binder until it is answered.  They have a “Good Faith Compliance Standard” this first year and have indicated that no one will be fined the first year if they are unable to complete it correctly.

The “Uniform Glossary of Coverage and Medical Terms” that is supposed to be provided with the SBC, can be found at

If the denial of your claim is not related to your (or your beneficiary’s) failure to meet the requirements for eligibility under the terms of your employer’s HRA, you may be eligible to request an external review.  View current procedures and timeline relevant to the external review request at or call the Employee Benefits Security Administration,
866-444 EBSA (3272).

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