close
Share with your friends

Rev. Proc. 2020-43: Maximum amount allowed to be newly made available for “excepted benefit” HRAs for 2021

Rev. Proc. 2020-43

The IRS today released an advance version of Rev. Proc. 2020-43 that provides the maximum amount allowed to be newly made available for plan years beginning after December 31, 2020, and before January 1, 2022, for “excepted benefit” health reimbursement arrangements (HRAs) remains $1,800.

1000

Related content

Under Reg. section 54.9831-1(c)(3), certain group health plans qualify as limited excepted benefits that are not subject to certain group health plan requirements of the Code.

  • Reg. section 54.9831-1(c)(3)(viii) provides rules for HRAs and other account-based group health plans to qualify as limited excepted benefits (excepted benefit HRAs).
  • Reg. section 54.9831-1(c)(3)(viii)(B) provides that amounts newly made available for each plan year under an excepted benefit HRA may not exceed $1,800, and that for plan years beginning after December 31, 2020, the $1,800 dollar amount is increased by the applicable cost-of-living adjustment.

Rev. Proc. 2020-43 [PDF 36 KB] provides that for plan years beginning after December 31, 2020, and before January 1, 2022, the maximum amount that may be made newly available for the plan year for an excepted benefit HRA under Reg. section 54.9831-1(c)(3)(viii) remains $1,800.

The revenue procedure states that the IRS and Treasury Department intend to publish by June 1, 2021, the adjusted amount for plan years beginning after December 31, 2021, and before January 1, 2023.

The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.

Connect with us

 

Want to do business with KPMG?

 

loading image Request for proposal