On August 19, 2011, the Center for Consumer Information & Insurance Oversight (CCIIO), a division of the Department of Health and Human Services (HHS) in charge of implementing certain requirements under the Affordable Care Act (ACA), issued guidance addressing health reimbursement arrangements (HRAs) and the ACA's annual limit requirement.

Section 2711 of the Public Health Service Act, as added under the ACA, generally prohibits group health plans and health insurers from imposing lifetime or annual limits on essential health benefits, but allows restricted annual limits for essential health benefits for certain plan years (see Practice Note, Lifetime Limits, Annual Limits, and Essential Health Benefits Under the ACA). Under regulations jointly issued by HHS, the Department of Labor and the Internal Revenue Service (collectively, the Departments), HHS may waive the restricted annual limits for group health plans if compliance with the limits would either:

Group health plans must individually apply for a waiver or a waiver extension.

Previously, the Departments distinguished between:

The Departments indicated that when an HRA is integrated with other health coverage and that other coverage alone satisfies the requirements of Section 2711, the HRA need not satisfy Section 2711. According to the new CCIIO guidance:

Therefore, the guidance exempts as a class all HRAs from having to individually apply for an annual limit waiver, for plan years beginning on or after September 23, 2010 but before January 1, 2014, if they were:

Also, for employers that maintain an HRA and other coverage, regardless of whether the HRA and coverage are integrated, the other coverage must either:

Waiver and waiver extension applications must be received by September 22, 2011.