HRA Waivers: Does It Impact HCSP?
The Public Health Service Act (PHS Act) generally prohibits group health plans and health insurance issuers from imposing lifetime or annual limits on the dollar value of health benefits. This year, if a plan applies a dollar limit on coverage, that limit must be at least $1.25 million.
Supplemental guidance released on August 19, 2011
The Center for Consumer Information and Insurance Oversight (CCIIO) released guidance on August 19, 2011 that exempts stand-alone Health Reimbursement Arrangements (HRAs) from the annual limit restrictions in the Patient Protection and Affordable Care Act (ACA).
While the HCSP is not an HRA, it does share some similarities. According to the CCIIO guidance, “an HRA is a self-funded medical reimbursement plan funded solely by employer contributions and not through salary reductions.” The majority of HCSP accounts are funded through employee payroll deductions or severance; however, it is possible to fund the accounts solely by employer contributions.
Annual notice to participants
Although HCSP is exempt from the annual limit amount, MSRS has decided to comply with the Annual Notice to participants and record retention requirements. The notice is necessary for consumers to understand the value and quality of the coverage they have.
The notice must be provided to both current and new participants. As the plan administrator, MSRS has been advised by Health & Human Services that we are able to send the Annual Notice to participants.
- The 2011 Annual Notice was inserted with quarterly statements mailed in October 2011.
- The 2012 Annual Notice was inserted with quarterly statements mailed in January 2012.
- New enrollees will receive the notice in their HCSP Welcome Packet.
Please note, the only difference between the 2011 and 2012 notice is the dollar amount limit and the date.
To learn more