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Benefits

EBHRA Maximum to Remain at $1,800 for Plan Years Beginning in 2021

EBIA  

EBIA  

Rev. Proc. 2020-43 (Oct. 16, 2020)

Available at https://www.irs.gov/pub/irs-drop/rp-20-43.pdf

The IRS has announced that the maximum amount that can be newly made available for plan years beginning after December 31, 2020, and before January 1, 2022, under an excepted benefit health reimbursement arrangement (EBHRA) will not change and remains at $1,800. The announcement also indicates that IRS intends to publish the adjusted amount for plan years beginning after December 31, 2021, and before January 1, 2023, by June 1, 2021.

EBIA Comment: EBHRAs are “limited-dollar,” non-integrated HRAs that qualify as excepted benefits and were first available beginning in 2020. They can be offered by employers of any size and must meet specified requirements—for example, EBHRA participants must also be offered a traditional group health plan (enrollment is not required) for the plan year. For more information, see EBIA’s Consumer-Driven Health Care manual at Section XXVIII.C (“Excepted Benefit HRAs (EBHRAs)”). You may also be interested in our webinar “Learning the Ropes: An Introduction to HRAs and HSAs” (recorded 3/11/20).

Contributing Editors: EBIA Staff.

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