What types of tax reporting are required for HRAs?
Tax reporting of HRA contributions on Form W-2 is not required. Participants should not report contributions, earnings, or reimbursements on their individual Form 1040. However, those who are the divorced spouse or non-dependent survivor of an HRA participant must report the value of their HRA coverage as taxable income. In these cases, a tax statement and instructions will be mailed to them.

Participants will not receive a Form 1099 for any investment earnings or claim reimbursements. But, a Form 1099-MISC will be issued to participants whose zero-balance accounts were closed in 2022 with unsubstantiated debit card transactions. IRS rules require reporting the value of these unsupported transactions as taxable income to the participants.

Participants don't need IRS Form 1095-B to file their taxes.
Participants with health reimbursement arrangements (HRAs) that qualified as “minimum essential” coverage during any month in 2022 can log in online and print Form 1095-B after January 20, 2023. If they need to request a paper copy, they can call 1-888-659-8828. Form 1095-B is informational only. Participants should just keep it with their tax documents. They don’t need to file it with their individual return. 

Please report participant separation and rehire dates as they occur.
If you haven’t already, start reporting separation dates as your participants separate from service or retire. This helps your participants avoid potential Medicare coordination problems. Medicare should pay before (be primary to) a participant’s HRA if he or she is no longer working for the employer who set up the HRA.

Also, if you rehire former employees with an HRA under the Post-separation HRA Plan, you need to report their rehire dates. Post-separation HRA coverage for rehires must be limited to dental, vision, and qualified long-term care expenses and premiums until their re-employment ends, at which time you will need to report a new separation date.

To report separation and rehire dates: (1) log in; (2) click Participants on the menu bar; (3) click the Process a Participant Status Change button; and (4) follow the instructions. If you have multiple participant status changes to report, use the new Enrollment/Status Change Spreadsheet template.

Certain participants may need to elect "limited" HRA coverage.
Participants with fully claims-eligible HRAs in any of the situations listed below might want to consider electing limited HRA coverage. It could help avoid frustrating hassles down the road.

  1. Medicare Coordination. Participant is still employed by the employer who set up his or her HRA, the participant, his or her spouse, or a dependent have Medicare coverage, and the participant doesn’t want to be forced to use up accumulated HRA funds before Medicare will pay claims.
  2. HSA Eligibility. The participant, his or her spouse, or a dependent are making or receiving contributions to a health savings account (HSA). To qualify for HSA contributions, an individual must have no other first-dollar coverage, such as full HRA coverage.
  3. Premium Tax Credit Eligibility. The participant, his or her spouse, or a dependent are purchasing insurance through a marketplace exchange and are taking or intend to take the Premium Tax Credit (subsidy).

Participants can avoid potential problems by electing limited HRA coverage for themselves, their spouse, and/or a dependent as needed. They just need to complete and submit a Limited HRA Coverage Election form. The form, which contains more details, is available online. Log in and click Resources.

Start using our secure messaging center instead of email.
Please do not send private information by regular email. Use our secure messaging center instead. We typically respond to secure messages within 24 hours. Log in and click the envelope icon. Give it a try. It’s easy and safe.  

Participants should make sure their account information is current.
Please encourage your participants to make sure their contact information and other details we have on file for them are up to date. To check and make changes, participants should log in and click My Profile

Participants should review their investment allocation at least once a year.
Now is a good time for participants to review their investment allocation. Choosing the right pre-mixed portfolio or other allocation can help reduce risk and increase potential returns over time. Our Choosing Your Investment Allocation brochure contains more information for participants. To get a copy, log in and click Resources

Participants on military leave can keep filing claims.
Participants who have a claims-eligible HRA and are on military leave governed by the Uniformed Services Employment and Reemployment Rights Act (USERRA) may keep filing claims. Also, if the employer has stopped making HRA contributions due to a participant’s military leave, he or she can make voluntary after-tax HRA contributions under COBRA. Certain restrictions may apply.