• Agency Guidance Strikes a Major Blow for Individual Policy Premium Reimbursement and Stand-Alone Health Reimbursement Arrangements
  • December 20, 2013 | Authors: Ashley Gillihan; John R. Hickman; Carolyn E. Smith
  • Law Firms: Alston & Bird LLP - Atlanta Office ; Alston & Bird LLP - Washington Office
  • On September 13, the IRS and the Department of Labor (DOL) issued twin notices—IRS Notice 2013-54 and Technical Release 2013-03 (collectively, the “Agency Guidance”) —which adversely affect an employer’s ability to pay for major medical coverage issued in the individual market on a pre-tax basis and/or maintain a stand-alone defined contribution medical reimbursement plan, such as an HRA. The guidance created an explosion of interest within the employee benefits community with respect to such arrangements. This advisory provides an analysis of the Agency Guidance and its impact, including a summary reference chart of the arrangements that remain permissible and those that do not.