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ADA supports use of HRAs for dental benefits

December 18, 2018

By Jennifer Garvin

Washington — The ADA supports the use of health reimbursement arrangements in proposed regulations by the Internal Revenue Service, the Association told the agency in formal comments filed Dec. 12.

The proposed rules set forth conditions under which certain health reimbursement arrangements, also known as HRAs, would be recognized as limited excepted benefits, which could include dental benefits.

HRAs, are accounts set up and funded by employers to help pay for employee health care expenses, according to the IRS. Unlike health savings accounts, which are employee funded, HRAs are fully funded by the employers. These reimbursements are excludable from the employee’s income and wages for tax purposes.

“As an organization dedicated to assisting its members in advancing the overall oral health of the public, the ADA recognizes that these accounts play an important role in ensuring that consumers can afford care,” wrote ADA President Jeffrey M. Cole and Executive Director Kathleen T. O’Loughlin in a letter to IRS Commissioner Charles P. Rettig.

In the comments, the ADA said it supports the requirement that group health plan coverage be made available by the same plan sponsor for the same plan year.

The ADA also said it would like for the IRS to expand the HRA limits beyond the $1,800 for dependents and allow funds to be carried over. The ADA does not support the rule’s proposal to aggregate the amounts of these HRAs as this could decrease the funds available for dental care.

“Recognizing the need for children to have access to oral health care, the ADA asks that this amount be higher if the HRA covers dependents, as is currently the case for HRAs,” Drs. Cole and O’Loughlin wrote. “Additionally, if any of the funds in the HRA are not used during the plan year and are carried over to the next, they should not be included in the determination of whether the excepted benefit HRA is limited in amount. If the participant has multiple excepted benefit HRAs, then we believe each account should each have its own limit.”

Drs. Cole and O’Loughlin said the ADA supports the rule’s proposal “to allow excepted benefit HRAs to reimburse premiums for individual health insurance coverage that consists solely of excepted benefits or coverage under a group health plan that consists solely of excepted benefits” because this allows participants in a dental benefit plan to use the HRA to cover those costs.

The Association also supports the proposal requiring the excepted benefit HRAs be made available under the same terms to all similarly situated individuals.

“The ADA agrees that this requirement is necessary to prevent discrimination based on health factors,” concluded Drs. Cole and O’Loughlin.

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