Health Plan Administrator Seeks to Exempt HRAs from Health Reform Law Research Fees

By Staff Report

Sep. 6, 2011

A health plan administrator has asked the Internal Revenue Service to make it clear that health reimbursement arrangements are exempt from a fee on health insurance policies issued by insurers and self-funded employers.

That fee—to be used to fund research on medical outcomes as part of the federal health care reform law—will be $1 per plan participant for the first plan year ending after Sept. 30, 2012, and $2 per participant in succeeding years.

For plan years starting after Sept. 30, 2014, the fee will be indexed to reflect the percentage increase in national medical expenditures as published by the Department of Health and Human Services.

Responding to an IRS request for comments on rules to implement the fee, Coldwater, Michigan-based health plan administrator Infinisource Inc. argues that the fees should not be imposed on HRAs.

“While the amount of the fee is relatively minimal, the administrative burden is not,” Infinisource Chief Compliance Officer Rich Glass wrote in a letter sent to the IRS this week.

“In addition, we do not see any mention of HRAs in the legislative history” of the health care reform law, “nor do we see any congressional intent to include HRAs among the plans subject to the” fee, Glass wrote.

Very often, HRAs are linked to high-deductible health plans.

“In such cases, the employer would have already paid” the fee for the health care plan. “It would be unfair to require double payment of the fee for those employers,” Glass noted.  

Filed by Jerry Geisel of Business Insurance, a sister publication of Workforce Management. To comment, e-mail


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