---
title: Integrated HRAs - minimum value and affordability calculations
description: Learn more about integrated HRAs and how they affect minimum value and affordability for your group health insurance plan.
---

[Personalized Employee Benefits Resources | PeopleKeep ](https://www.peoplekeep.com/blog)

# [Integrated HRAs - minimum value and affordability calculations](https://www.peoplekeep.com/blog/bid/293189/integrated-hras-minimum-value-and-affordability-calculations)

 Written by [PeopleKeep Team](https://www.peoplekeep.com/blog/author/peoplekeep) | June 26, 2013 at 9:02 PM

The Internal Revenue Service (IRS) released proposed guidance on the minimum value and affordability rules under the Patient Protection and Affordable Care Act (ACA), including how [health reimbursement arrangements](https://www.peoplekeep.com/health-reimbursement-arrangement-hra) (HRAs) will be used in determining minimum value and affordability.

These rules provide guidance for employers with 50 or more [full-time equivalent employees](https://www.peoplekeep.com/blog/fte-calculation) (FTEs) on whether their employer-sponsored health coverage provides [minimum value](https://www.peoplekeep.com/blog/is-our-organizations-health-coverage-considered-minimum-value) (MV) and is affordable, for the purposes of the [employer mandate penalties](https://www.peoplekeep.com/blog/guide-to-aca-employer-penalties).

Employers with 50 or more FTEs that also offer an integrated HRA should use these guidelines for calculating if their health coverage meets minimum value and affordability.

## Introduction to integrated HRAs, minimum value, and affordability

Here are four important ACA concepts to be familiar with before understanding the proposed rules on minimum value and affordability:

- [Integrated HRA](https://www.peoplekeep.com/group-coverage-hra-gchra): An integrated HRA, also known as a group coverage HRA, is a health reimbursement arrangement (HRA) that employers offer alongside an employer-sponsored group health plan (usually a high-deductible plan). Employers use a GCHRA to reimburse employees for their out-of-pocket deductible expenses. The GCHRA is 100% employer-funded. 
- [Applicable large employer](https://www.peoplekeep.com/blog/faq-ales-and-the-aca-employer-mandate) (ALE): The ACA defines an applicable large employer as an organization with 50 or more FTEs. ALEs must either offer coverage that's affordable and meets minimum value or pay a tax penalty.
- Minimum value (MV): According to the ACA, a plan provides MV if the plan's share of the total allowed cost of benefits provided under the plan is at least 60%. In other words, it has an [actuarial value](https://www.peoplekeep.com/blog/what-are-the-metallic-tiers-of-coverage) (AV) of 60%. 
- Affordability: The ACA considers coverage affordable if an employee’s required premium contribution (for self-only coverage only) does not exceed 9.96% of household income for 20261. 

## Integrated HRAs and minimum value

The proposed rules address how employer contributions toward an integrated HRA will count toward the plan's minimum value and affordability. First, let's take a look at minimum value.

For minimum value determination:

- All HRA amounts that are made *newly available* under an integrated HRA for the current plan year are taken into account for MV purposes (assuming that the amounts may only be used for cost-sharing and not to pay insurance premiums).

## Integrated HRAs and affordability

According to the regulations2, integrated HRAs can also count toward affordability. IRS says that for the purposes of determining affordability, HRA amounts that are made *newly available* under an integrated HRA for the current plan year, are taken into account in determining affordability *only* if the employee may either:

- Use the HRA amounts only for premiums.
- Choose to use the HRA amounts for either premiums or cost-sharing.

1. [https://www.irs.gov/pub/irs-drop/rp-25-25.pdf](https://www.irs.gov/pub/irs-drop/rp-25-25.pdf)
2. [http://www.gpo.gov/fdsys/pkg/FR-2013-05-03/pdf/2013-10463.pdf](http://www.gpo.gov/fdsys/pkg/FR-2013-05-03/pdf/2013-10463.pdf)

[View full post](https://www.peoplekeep.com/blog/bid/293189/integrated-hras-minimum-value-and-affordability-calculations)

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