Excepted Benefit HRA



What’s An Excepted Benefit?

Generally, an excepted benefit is a medical benefit that is limited in scope to a specific medical condition or is otherwise independent of a health insurance plan. Examples are dental and vision benefits, specified disease coverage or fixed indemnity plans.


An excepted benefit HRA (EBHRA) is a new category of excepted benefits under HIPAA that is not subject to HIPAA portability or the ACA rules on lifetime and annual limits and preventive care; consequently, they are not subject to the HRA integration rules.

The EBHRA is unique because it is itself an excepted benefit; it reimburses for a broad range of medical expenses and would be considered a standard HRA subject to integration concerns but for the fact that it meets several specific requirements. It should not be confused with an HRA that only pays for other excepted benefits but is not itself an excepted benefit.

What’s Different About EBHRAs?

Qualification Requirements

To qualify as an EBHRA, the plan must meet the following requirements:

Other Coverage

Other group health plan coverage (that is not limited to excepted benefits and that is not an HRA or other account-based group health plan) must be made available to the participant by the same plan sponsor for the plan year. In addition, the EBHRA cannot be offered to any employee who is not eligible for the other group health plan coverage.TooltipNote that participants in the EBHRA cannot also be offered an ICHRA.

Annual Benefit Amount

What to Consider Before Offering an EBHRA

Amounts made newly available each year may not exceed the amount established by the IRS,Tooltip$1,800 for plan years 2020 and 2021 indexed for inflation.

Reimbursable Expenses

Eligible expenses that can be reimbursed from an EBHRA include Section 213(d) medical care expenses, EXCEPT:

However, the EBHRA may be used to pay:

Reimbursable expenses can be limited to any one expense or set of expenses and plan documents should reflect what expenses are reimbursable.


The EBHRA must follow HIPAA nondiscrimination rules regarding its availability to all similarly situated individuals. In addition, coverage must be made available without regard for any health factor.

EBHRA Health Plan Requirements


An EBHRA is a group health plan and will be subject to ERISA to the extent the sponsoring employer is not exempt from ERISA. Accordingly, all the rules generally applicable to ERISA plans will apply to an EBHRA, including:


EBHRAs are subject to HIPAA’s privacy and security rules. Note that these requirements apply regardless of whether a plan is subject to ERISA.