QUESTION

I have a new Health Reimbursement Arrangement (HRA) from my small employer. Can I use it to enroll in coverage if it is outside of Open Enrollment?

Individuals with coverage | Coverage for Employees of a Small Employer
ANSWER

It depends on the type of HRA you received. If you received an “individual coverage” HRA or a Qualified Small Employer Health Reimbursement Arrangement (QSEHRA), you should be eligible for a special enrollment period to sign up for an individual market plan. You should visit the health insurance marketplace in your state to determine whether you are eligible for federal premium tax credits or cost-sharing help.

If you receive an “excepted benefit” HRA to supplement your traditional employer health plan, you should not need a special enrollment to use your HRA. Note, however, that if you choose to use your excepted benefit HRA to purchase more limited insurance products, such as a short-term plan, such products are not replacements for a comprehensive health insurance plan. And, unlike your employer plan, some of these products can deny you coverage of a pre-existing condition. If your employer offers you an excepted benefit HRA and you are interested in purchasing a supplementary product, you should consult your employer’s human resources department for qualified, impartial advice on the financial risks and benefits of purchasing such supplementary products.

(45 C.F.R. § 155.420(d); 26 C.F.R. §54.9802-4; 26 C.F.R. § 1.36B-2; 26 C.F.R. §54.9831-1; Individual Coverage HRA Model Notice; IRS FAQs for New Coverage Options for Employers and Employees).

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