On December 16, 2015, IRS issued Notice 2015-87 that said “Treasury and IRS are aware that many HRAs do not currently contain the restriction necessary to integrate an HRA with employee-only coverage under the employer’s other group health plan”. We learned from this most recent guidance that an HRA plan must be in compliance both by design and by operation. The plan document should specifically state that the reimbursement not be used for individual health insurance. In addition, the employer should not reimburse based on the fact of the individual buying health insurance.
If you have an non-integrated reimbursement plan that covers more than one person then it is time to update your plan!