Compliance Q&A: Medicare and HSA Contributions, QSEHRAs, and COBRA Requirements
- August 21, 2024
- Posted by: Gus Altuzarra
- Category: Compliance
7.11.24 | MEDICARE AND HSA CONTRIBUTION
Q. An employee turns 65 in 2025 and is considering enrolling in Medicare. The employee is on an HSA-compatible plan with their 62-year-old spouse. Though the employee may be covered under Medicare next year and ineligible for a contribution in the HSA, could the spouse still make HSA contributions if they open their own account?
A. The employee’s enrollment in Medicare will not impact the spouse’s ability to contribute to an HSA, provided they are otherwise eligible (i.e., enrolled in an HDHP only).
2.22.24 | QUALIFIED SMALL EMPLOYER HRAS AND COBRA
Q. A client of ours will be adding a qualified small employer HRA (QSEHRA) plan. Are these plans COBRA eligible?
A. An employer is eligible to adopt a QSEHRA only if both of the following requirements are met:
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The employer must not be an applicable large employer (ALE) under Code Section 4980H; that is, the employer must employ fewer than 50 full-time equivalent employees in the prior calendar year.
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The employer does not offer a “group health plan” to any of its employees.
QSEHRA plans, unlike other types of HRAs, are not considered group health plans and therefore are not subject to COBRA.
7.4.24 | REQUIREMENT TO OFFER COBRA
Q. When is an employer required to offer COBRA?
A. An employer is required to offer COBRA in a calendar year if the employer had 20 or more full-time employees (including full-time equivalent employees) for more than half of the working days in the preceding calendar year. Part-time employees count as a fraction of a full-time employee depending on how much they work compared to a full-time employee. If a full-time employee works 40 hours per week, a part-time employee working 20 hours per week would be a .5 full-time equivalent (FTE) employee and a part-time employee working 16 hours per week would be a .4 FTE.
