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HRA card Proposed rules that would allow some employers to contribute funds to employee health reimbursement arrangements for purchasing individual health insurance are coming closer to reality. (Photo: Shutterstock)

The new rules were proposed late last year by the U.S. Department of Labor, Department of Health and Human Services, and the Treasury Department. They would allow employers to set up HRAs to help employees pay premiums for health insurance policies within the individual marketplace in each state. If finalized, the change would let some employers terminate group health plans and shift workers into the individual markets.  

Separately, the Internal Revenue Service also issued a notice (2018-88) proposing safe harbors that would allow employers to satisfy the “employer mandate” provisions under the Affordable Care Act by funding HRAs for employees to buy health insurance, thereby avoiding severe tax penalties for noncompliance, according to the IRS notice of developing guidance, which is preliminary and is not binding.

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