What is an MTA?
Medical travel benefits may be designed as a Medical Travel HRA or an Excepted Benefit Employee Assistance Program (EAP). Excepted Benefit Medical Travel Accounts (MTAs) are employer-sponsored employee assistance programs that are specifically designed to pay for medical travel. Expected Benefit Medical Travel Accounts accounts are employer-owned and employer-funded and employees will be assessed income taxes for the reimbursements they receive. Since these are after-tax excepted benefits, employers have much more flexibility and control over how the program is designed.
- How much they’ll reimburse and at what cadence. For example, employers can choose if they’ll offer their allowance on a monthly, quarterly or yearly basis.
- Who qualifies to participate in the MTA as long as the eligibility policies aren’t discriminatory in nature.
- The travel expenses for which they’ll reimburse. For example, they choose if they’ll only reimburse for travel that’s outside a certain radius of the employee’s home, whether or not they’ll cover all lodging or only lodging above a certain amount per night, etc.
- Verification requirements for the travel expenses (not the medical procedure).
- Plan duration and plan-end extension options such as offering a runout period or permitting a carryover amount.
- Whose medical travel is eligible. Employers can choose whether or not they will cover travel for spouses’ and dependents’ care or solely medical travel necessary for the employees’ care. They can also choose if they will cover necessary or nonessential companion travel expenses.
Since MTAs are employer-owned, any unused portion of the travel allowance gets reabsorbed by the employer at the end of the plan term.
Expected Benefit MTAs makes them distinct from Medical Travel HRAs, which are not HSA compatible and are capped by the IRS at $1,950 per year, with caps on lodging at $50 a night and mileage reimbursement at 22 cents a mile (as of 2023).