’Integration’ conditionsThe regulation permits an HRA to be “integrated” with certain qualifying individual health plan coverage. In order to be integrated with individual market coverage, the HRA must meet several conditions:
- Any individual covered by the HRA must be enrolled in health insurance coverage purchased in the individual market, and must substantiate and verify that they have such coverage;
- The employer may not offer the same class of individuals both an HRA and a “traditional group health plan”;
- The employer must offer the HRA on the same terms to all employees in a “class”;
- Employees must have the ability to opt out of receiving the HRA;
- Employers must provide a detailed notice to employees on how the HRAs work;
- Employers may not create a class of employees younger than age 25, whom they might want to keep in their group plan because they’re healthier.
- For employers with one to 100 employees, a class cannot have less than 10 employees; for employers with 100 to 200 employees, the minimum class size is 10% of the workforce; and for employers with 200 or more employees, the minimum class size is 20 employees.