February 20, 2015 by Tony Novak
I received a call for a consult today from a California CPA asking about the legality of a Health Reimbursement Arrangement (HRA) to pay for uninsured expenses for a one person (husband and wife) C corporation. It seemed like a good fit and could work under the new or clarified ACA rules under Notice 2015-17 for HRAs until I heard that the underlying health insurance was provided through the spouse’s employer. Unfortunately this does not meet the requirement for “employer-provided coverage” with regard to the C corporation and therefore it is impossible to have a qualified HRA that is properly integrated with qualifying health insurance.
I recommended that they look into switching to a Health Savings Account instead.