Tax Facts

8873 / Does a retiree-only health reimbursement arrangement (HRA) provide minimum essential coverage under the ACA market reform provisions?

Yes. A retiree-only health reimbursement arrangement (HRA) is not subject to the annual dollar limit prohibitions because it is a plan with fewer than two current employees.1 This is the case even if the retiree-only HRA is designed to reimburse the retiree for the cost of health coverage purchased through the individual health insurance exchanges.2 Because a retiree-only HRA has fewer than two current employees, it provides minimum essential coverage for purposes of IRC Sections 5000A and 36B.





1.  DOL Technical Release No. 2013-03.

2.  Preamble to the Interim Final Rules for Group Health Plans and Health Insurance Coverage Relating to Status as a Grandfathered Health Plan Under the Patient Protection and Affordable Care Act, 75 Fed. Reg. 34538, 34539.

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