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Starting January 1, 2020, some employers will be able to offer individual coverage HRAs (ICHRAs) to help employees pay for individual health insurance. Final rules were established in June 2019 but there were questions about how existing federal rules will apply to ICHRAs.
The IRS recently published proposed regulations on how the ACA’s pay or play rules (Section 4980H) and IRS Code Section 105(h) nondiscrimination requirements will affect ICHRAs. If certain requirements are met, offering an ICHRA would generally satisfy an employer’s pay or play obligation. Applicable large employers (ALEs) may use the affordability safe harbors to determine affordability for an ICHRA.
Comments on the proposed rules will be accepted until December 30, 2019. Employers can generally rely on the guidance provided in the proposed rule prior to a final rule being issued.