AV & HRAs / HSAs FAQ
AV: Actuarial Value
HHS: Health and Human Services
HRA: Health Reimbursement Arrangement
HSA: Health Savings Account
- May an issuer refuse to sell an HSA or HRA compatible plan to an employer in the small group market if the employer's HSA or HRA contribution is a different amount than specified in the issuer's plan filing & used to calculate the plan's actuarial value?
Yes. In the small group market, actuarial value is determined by the amount of annual employer contributions to an HSA and amounts newly-made available through an integrated HRA that can only be used for cost sharing. 45 CFR 156.135(c). The HHS actuarial value calculator treats these HSA or HRA contributions as first-dollar coverage, effectively reducing the deductible dollar-for-dollar in the actuarial value determination. For example, a $1,000 deductible paired with a $1,000 HSA contribution is treated as a $0 deductible in the AV calculator. In order to make HSA- and HRA-compatible designs available in the small group market, issuers include a specific HSA or HRA employer contribution amount in their plan filings. If an employer contributes more or less than the amount specified in the plan design (or contributes any amount in combination with a plan that does not designate an HSA or HRA contribution) then the plan is no longer compatible with the AV requirement, and an issuer may refuse to sell the plan to the employer.
- May an issuer require assurances from its customers that contributions to a HSA or HRA are equal to the amount, and no greater than the amount, included in the issuer's plan filings?
Yes, at the issuer's option. In order to maintain integrity of the filed plan designs approved by DIFS, issuers may require customers to provide assurances that the employer's contributions to the HSA or HRA are equal to the amount used to calculate the plan's actuarial value.
The answers provided are not meant to be a substitute for legal advice.