How will HRAs and HSAs work on public exchanges?

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The answer to that question is still fuzzy. That’s because while the Department of Health and Human Services has confirmed to Employee Benefit News  that health reimbursement arrangements and health savings accounts will be offered on the public exchanges, the organization still hasn’t released the details and regulations surrounding these accounts. So where do industry leaders think we’re headed with these accounts?

“Anything out of the public exchange will be the same analysis as insurers will have to offer to groups,” says Mark Holloway, a director of compliance at Lockton Benefit Group. “HSAs and HRAs are consumer-driven plans and they’ll continue to grow in popularity, as they’re effective at holding down costs.”

Holloway adds that the feds have not yet released how they’ll evaluate expenses at 60%, the lowest tier of coverage available on the public exchanges. But he says if an HRA is on a public exchange, it will most likely be attached to a high deductible plan like the 60% coverage level.

The one thing we do know, HRAs will not be as flexible as they once were. “The regulators have been pretty clear that employers won’t be able to set up stand-alone HRAs and have them use it to buy an individual policy on an exchange,” says Amy Bergner, a director of human resources at Pricewaterhousecoopers. She echoes Holloway in terms of how the accounts will be used. “The products on the shop exchanges are still really under development,” Bergner continues. “It’s probably too early to tell whether there will be robust account based plans.”

But robust is what will most likely interest small business employers, those with less than 50 employees, which will be allowed to purchase insurance on the shop exchange. And that interest will only continue to spread.

“Not everyone has gone down the consumer-driven route before but I think that’s where most employers will be in 2014 and the future, just because of cost,” Holloway says.

HHS did not respond to a request for timing of HRA and HSA regulations on the exchanges.

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