When employers want to supplement traditional group health plans without the burden of heavy legislative mandates, the Excepted Benefit Health Reimbursement Arrangement (EBHRA) becomes a powerful option. Central to implementing an EBHRA is the EBHRA plan document—a foundational requirement that ensures your benefit structure is both compliant and effective.
What Is an EBHRA?
An EBHRA is a limited-dollar Health Reimbursement Arrangement that reimburses employees for out-of-pocket healthcare costs related to excepted benefits—such as dental, vision, short-term medical coverage, long-term care, COBRA premiums, copays, and deductibles. Unlike other HRAs, you don’t need employees to enroll in the group plan to participate, offering flexibility while maintaining tax-free reimbursement.
Why the EBHRA Plan Document Matters
To legally establish an EBHRA, you must have a formal, written plan document and an accompanying Summary Plan Description (SPD)—both are necessary under ERISA regulations. The plan document outlines how the benefit works, including contribution limits, eligibility requirements, reimbursement rules, and compliance measures, while the SPD informs participants of their rights and responsibilities.
Key Design Features of an EBHRA
Contribution Caps – For 2025, employer contributions are capped at $2,150 per employee per year, indexed for inflation.
Eligible Expenses – Reimbursable costs include premiums for excepted benefits, COBRA, STLDI, cost-sharing expenses, long-term care, and similar out-of-pocket charges—but not premiums for individual or traditional group health plans (with COBRA as a rare exception).
Uniform Availability – You must offer the EBHRA to all employees in a similar class under identical terms to ensure nondiscrimination compliance.
Complementary Coverage Required – Employers must offer a traditional group health plan—even though employees may decline it—and EBHRA must not overlap with other HRAs like ICHRA.
Benefits of Having a Thorough Plan Document
Compliance – With ERISA, HIPAA, and IRS regulations all in view, the document ensures legal readiness and audit resilience.
Transparency & Communication – Employees understand exactly what is covered, how to submit claims, and who administers the plan.
Efficient Administration – Clear structure streamlines operations like enrollment, claims processing, and fund rollovers.
Final Thoughts
Offering an EBHRA can enhance your benefits package, giving employees tax-advantaged support for important but often neglected healthcare needs. Yet, it all begins with a well-crafted EBHRA plan document and SPD—your legal roadmap to offer flexibility, stay compliant, and empower your workforce with meaningful support.
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