<< Back to blog

Guidance on HRAs, FSAs and the Affordable Care Act (ACA)

34631333_sThe IRS has issued specific guidance on HRAs, FSAs and other employer health care arrangements. The following article goes into some detail on IRS Notice 2013-54.


Agencies Issue Guidance on Application Of ACA to HRAs, FSAs, Other Arrangements

Tuesday, September 17, 2013

By Lydia Beyoud

From Bloomberg BNA: https://www.bna.com/agencies-issue-guidance-n17179877112/

Sept. 13 –The Internal Revenue Service and the Department of Labor’s Employee Benefits Security Administration issued guidance on the application of certain provisions of the Affordable Care Act to health reimbursement arrangements, flexible savings accounts and other employer-sponsored health-care arrangements.

The guidance, in IRS Notice 2013-54 and the nearly identical DOL Technical Release 2013-03, both issued Sept. 13, provides that a group health plan, including an HRA, used to purchase coverage on the individual market won’t be considered as integrated with individual market coverage for the purposes of the annual dollar limit prohibition or for the preventive services requirements under the law.

Certain market changes introduced by the ACA only apply to group health plans with more than one current employee on the first day of the plan year, in accordance with tax code Section 9831(a)(2) and Section 732(a) of the Employee Retirement Income Security Act, the guidance said.

The market changes do not apply to a group health plan with regards to its provision of excepted benefits such as accident-only coverage, disability income, certain limited-scope dental and vision benefits, certain long-term care benefits and certain health FSAs, the notice said.

The guidance applies to plan years beginning on and after Jan. 1, 2014, but taxpayers may apply it for all prior periods, the notice and technical release said.

IRS Notice 2013-54 is available at https://www.irs.gov/pub/irs-drop/n-13-54.pdf.

DOL Technical Release 2013-03 is available at https://www.dol.gov/ebsa/newsroom/tr13-03.html.



Core Documents, Inc. has been providing free consulting, affordable plan documents, and plan updates as needed for Section 125 Cafeteria Plans and Health Reimbursement Arrangements since 1997. See more information about these fringe benefit plans at Core Documents’ website: https://www.coredocuments.com, or call toll free 1-888-755-3373.

For more information on Guidance on HRAs, FSAs and related topics, read these Core Documents’ articles and blog posts:

HRA Guidance: Permanent Fix Needed for Small Employers, Says NASE

Employer Funded Health FSA W2 Reporting Guidance – HRA and HSA Excluded

Impact of ACA (ObamaCare) on HRAs, health FSAs, and employer payment plans