The Internal Revenue Service (IRS) has postponed the notice requirement for the new “qualified small employer health reimbursement arrangement” (QSEHRA) program, until the agency issues further guidance.

The IRS and the U.S. Department of the Treasury “understand that some eligible employers may find it difficult to comply with the written notice requirement absent additional guidance concerning the contents of the notice,” the IRS explained in Notice 2017-20. “Treasury and IRS intend to issue that guidance in the near future.”

Until then, “an eligible employer that provides a QSEHRA to its eligible employees for a year beginning in 2017 is not required to furnish the initial written notice to those employees until after further guidance has been issued by Treasury and the IRS,” the IRS continued. “That further guidance will specify a deadline for providing the initial written notice that is no earlier than 90 days following the issuance of that guidance.”

The 21st Century Cures Act, signed December 13, 2016 (Pub. L. 114-255), revived the stand-alone HRA option for certain small employers by creating a tax-deferred QSEHRA that is exempt from many “group health plan” requirements. QSEHRAs are available to employers with fewer than 50 full-time employees that do not offer a group health plan.

The act allows annual QSEHRA contributions of up to $4,950 ($10,000 for family coverage), adjusted for inflation and prorated for partial years. A QSEHRA sponsor must provide all eligible employees with a notice that includes:

• The employee’s permitted amount for the year;
• An instruction to provide that information in any application for an Affordable Care Act (ACA) exchange premium subsidy; and
• A warning that the employee may be taxed under the ACA’s individual mandate, and owe income tax on QSEHRA reimbursements, unless he or she obtains “minimum essential coverage.”

Before this extension was issued, many QSEHRA notices would have been required by March 13.