Under ACA for 2014. The Treasury and Department of Labor recently published guidance on the application of the Affordable Care Act Market Reforms on certain health care arrangements, such as Health Reimbursement Accounts (HRAs). Importantly, this guidance provides that, beginning with the 2014 plan year, employers may no longer utilize stand-alone general purpose HRAs for current employees. Starting next year, an HRA will generally not be permitted unless it is integrated with a group health plan that does not have annual dollar limits. To be integrated: (i) the employer must offer coverage under a group health plan, (ii) the employee receiving the HRA must actually enroll in a group health plan, (iii) the employee must be permitted to permanently opt-out of and waive future reimbursements from the HRA at least annually, and (iv) upon termination of employment, either the remaining amounts are forfeited or the employee is permitted to permanently opt-out of and waive future reimbursements from the HRA. This opt-out feature is required because the benefits provided by the HRA generally will constitute minimum essential coverage and will preclude a covered individual from claiming a premium tax credit under the marketplace exchange. Significantly, the guidance points out that, although an individual is required to enroll in group health plan coverage, the individual may enroll in a group health plan other than the plan offered by his or her employer. For example, an individual may be considered to participate in an integrated HRA if he or she declines coverage under his or her employer’s plan and instead enrolls for coverage under a spouse’s employer’s group health plan. However, an HRA paired with an individual health insurance policy would not be considered integrated. If at some point in the future an employee ceases coverage under a group health plan, he or she would still be permitted to be reimbursed from an existing HRA balance under the terms of the HRA but would not be eligible for new employer contributions. Along with integrated HRAs, employers will also be permitted to continue or establish HRAs for retirees. In addition to HRAs, this guidance addresses employer payment plans. Starting next year, employers may not allow employees to purchase individual coverage on a pre-tax basis through a cafeteria plan. However, the purchase of excepted benefits on a pre-tax basis under a cafeteria plan will be permitted. Employers should review their HRAs, cafeteria plans, and other employer payment plans and amend them as necessary before the first day of the plan year in 2014. (IRS Notice 2013-54; DOL Technical Release No. 2013-03)