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

With an emphasis on practical strategies to improve productivity and performance, and limit potential liabilities, Bulletin to Management™ concisely analyzes new developments in employment and human resources management.

By Lydia Beyoud  

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

DOL Technical Release 2013-03 is available at