HRA Deadline Calendar: What Your Clients Need to Know This Year

Health Reimbursement Arrangements (HRAs) offer small business owners significant flexibility in how they support employee healthcare costs. But that flexibility comes with responsibility—and a calendar full of critical deadlines that, if missed, can derail plan administration and create compliance headaches.

As a benefits advisor, you know that staying ahead of HRA deadlines isn’t just about avoiding penalties. It’s about positioning your clients to make strategic decisions, communicate effectively with employees, and maintain the flexibility that makes HRAs attractive in the first place.

Let’s walk through the essential HRA deadline calendar every advisor should have on their radar.

Understanding HRA Plan Years and Their Impact

Before diving into specific deadlines, it’s important to understand that HRA deadlines are fundamentally tied to your client’s plan year—not the calendar year. Many small business owners assume HRA rules follow the same January-to-December timeline as their company, but that’s often not the case.

Plan year selection matters because it determines: - When employees must enroll or make elections - When coverage begins and ends - When unused funds expire (or roll over) - When compliance testing must occur - When required notices must be distributed

Most HRAs operate on a calendar year plan (January 1 – December 31), but some employers choose non-calendar plan years. As an advisor, verify your client’s actual plan year early in your engagement—this single detail drives nearly every other deadline.

Critical HRA Deadlines Throughout the Year

January: Plan Year Start and Employee Elections

For calendar year plans, January is ground zero for HRA administration.

If your client is starting a new HRA or making material changes to an existing plan, employees need clear enrollment communication before coverage begins. While there’s no federal “open enrollment” requirement for HRAs (unlike group health plans), best practice dictates giving employees at least 30 days’ notice before plan start to understand their benefits.

Action items for your clients: - Distribute summary plan descriptions and enrollment materials - Collect employee elections for salary reduction amounts - Confirm employee eligibility and dependent information - Update payroll systems for benefit deductions - Establish procedures for mid-year elections and claims

February-March: Compliance Testing Window

This is where many advisors help clients avoid costly mistakes. For integrated HRAs (those coordinated with group health insurance), compliance testing typically occurs in early spring to ensure the plan doesn’t discriminate in favor of highly compensated employees.

Key compliance tests include: - Eligibility testing: Ensure non-highly compensated employees aren’t excluded or have significantly worse eligibility terms - Benefits testing: Verify that HRA contributions don’t systematically favor higher earners - Usage testing: For HRAs with maximum reimbursement amounts, confirm that highly compensated employees aren’t using the plan disproportionately

The IRS provides safe harbors for certain HRA designs, but not all plans qualify. If your client’s HRA doesn’t meet safe harbor requirements, you’ll need to run these tests and potentially make corrective adjustments.

Documentation tip: Keep testing results and supporting spreadsheets for at least 7 years. The IRS looks closely at HRA compliance, and solid documentation is your defense.

Mid-Year: Changes in Status and Plan Modifications

HRAs have different rules than group health plans when it comes to mid-year elections. Generally, employees cannot change their HRA elections unless there’s a qualifying event (marriage, birth of a child, loss of coverage, etc.). However, some employers build flexibility into their plans to allow annual reviews or adjustments.

Common mid-year triggers include: - Life events requiring status changes - Changes to employee health insurance elections - Corrections to elections based on administrative errors - Employer contributions being adjusted

If your client wants to allow mid-year elections beyond qualifying events, the plan document must explicitly permit this. It’s a compliance detail many overlook.

September-October: Prepare for Year-End Planning

This is the time to: - Review employee usage patterns and HRA spending - Identify employees who may have excess balances - Plan any year-end adjustments to employer contributions - Communicate year-end deadlines to employees - Prepare for the claims submission surge

For many small business owners, this is also when they evaluate whether their HRA strategy is working. Have employees used their benefits? Are there unused funds creating cash flow questions? Should contributions change for next year?

November-December: Year-End and Transition Planning

The most critical deadline cluster of the year:

Claims deadline: Employees typically have a deadline (often December 31 or March 15 of the following year) to submit claims incurred during the plan year. Confirm your client’s plan document for the exact deadline and communicate it clearly to employees.

Fund exhaustion decisions: Determine how unused balances will be handled. HRAs can have “run-out” periods allowing reimbursement of prior-year claims into the new year, but specifics depend on plan design. Some plans allow carryover; others don’t.

Plan document review: If any changes are planned for the next plan year, now is the time to update plan documents. Changes like: - Contribution amounts - Eligibility requirements - Coverage limits or exclusions - Claims administration procedures

These modifications require updated plan documents before the new plan year begins. Waiting until January often creates compliance issues.

Notice requirements: Depending on your state and the specific HRA structure, you may need to provide notices such as: - Summary of benefits and coverage (SBC) for integrated HRAs - Notice of material changes to plan terms - Claims procedures and appeal rights

The ERISA Documentation Requirement

One deadline that applies year-round: keeping your client’s plan documents current. HRAs are ERISA plans (with rare exceptions), which means they require formal written plan documents, summaries, and administrative procedures.

Many small business owners operate informally with HRAs, assuming plan terms can live in email conversations or verbal agreements. This creates serious compliance risk. The plan documents must be in writing and distributed to participants.

Essential HRA documentation includes: - Formal plan document - Summary plan description (SPD) - Claims procedures and appeal rights documentation - Notices of material modifications - Annual compliance testing (if required)

Planning Around Deadline Timing

As an advisor, you can help your clients build strategic timelines that align HRA decisions with their business cycle:

High-volume industries: If your client’s business is seasonal, consider a plan year that aligns with their busy season. This affects when employees are making elections and when usage typically peaks.

Cash flow management: Non-calendar plan years can help smooth cash flow. A July–June plan year spreads HRA costs differently than calendar years.

Coordination with other benefits: If your client offers a Section 125 cafeteria plan alongside the HRA, ensure deadlines align and that plan documents reflect the integrated structure.

Common Deadline Mistakes (And How to Avoid Them)

Mistake #1: Assuming HRA follows group health plan rules Group health plans have open enrollment periods; HRAs don’t necessarily. Ensure your client understands the distinction.

Mistake #2: Missing mid-year election restrictions Employees can’t simply change HRA elections anytime. Your plan document must clearly spell out when elections can be changed.

Mistake #3: Forgetting claims runout periods If employees have 90 days after year-end to submit claims, that deadline matters. Help clients communicate it clearly.

Mistake #4: Not updating plan documents after changes Material changes require updated documentation. Informal changes create compliance exposure.

Your Action Plan

As you work with clients on HRA strategy, build a personalized deadline calendar for each engagement. Mark: - Their specific plan year dates - Required compliance testing windows - Employee communication deadlines - Claims submission deadlines - Plan document update requirements

Share this calendar with your clients—not just once, but quarterly. A simple email reminder in advance of critical deadlines prevents the majority of HRA compliance issues.

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Nexus Benefit Solutions is an independent employee benefits advisory firm based in West Michigan. Questions? Reach out at jason@nexusbenefitsolutions.com or call 616-425-9740.