The Departments of Labor and Treasury have released guidance (Technical Release 2013-03 and Notice 2013-54) clarifying the effect of the Affordable Care Act (“ACA”) on employee assistance plans (“EAPs”) and account-based arrangements, such as health reimbursement arrangements (“HRAs”) and health flexible spending arrangements (“health FSAs”).  The guidance indicates that the Department of Health and Human Services intends to issue guidance in substantially identical form.

These are the main points addressed in the new guidance:

• EAPs that do not provide significant benefits in the nature of medical care or treatment are “excepted benefits”—they do not have to satisfy ACA’s group health plan requirements, and they do not make participants ineligible for premium tax credits;
• HRAs can be integrated with a group health plan maintained by a different  employer (such as a spouse’s employer) for purposes of satisfying ACA’s prohibition on annual dollar limits and the requirement to cover certain preventive services without cost-sharing;
• Participants with access to reimbursement from HRAs—including retiree-only HRAs—are not eligible for premium tax credits;
• Health FSAs are exempt from ACA’s coverage reforms only if they are offered under a cafeteria plan and also qualify as “excepted benefits;” and
• Employers may not reimburse, on a pre-tax basis, premium payments by employees for health insurance policies purchased in the individual market.

The new guidance is generally applicable for plan years beginning on or after January 1, 2014, but employers may elect to rely on it for prior periods.Continue Reading New Guidance Explains How ACA Applies to EAPs, HRAs, and Health FSAs