Administration Proposes Rule Increasing Use of Health Reimbursement Accounts

ANCOR is sharing this Politico Pro story because it could be relevant to our members in their role as employers.

“The Trump administration is proposing new rules making it easier for employers to use health reimbursement arrangements to help workers cover medical costs.

A proposed rule expected to be released Tuesday allows employers to provide subsidies to buy individual market coverage, either on or off the Obamacare exchanges.

The administration also wants to let employers that already offer workers coverage to finance HRAs for up to $1,800 a year, indexed to inflation, to help cover out-of-pocket costs.

The administration is touting the proposal as a way to make it easier for employers, particularly small- and mid-sized companies, to offer coverage to their workers. The proposed changes follow regulations addressing short-term and association health plans that the administration argues will similarly expand options and lower costs for people who struggle to afford Obamacare plans.

The administration said that the new proposal will include safeguards to ensure that employers can’t dump their sickest workers into the Obamacare markets. Companies offering HRAs will have to make them available to an entire class of workers, such as part-time or seasonal workers.

The Treasury Department estimates that 10 million employees would eventually get coverage through HRAs. Of those, it believes 1 million are individuals who are currently uninsured.

Health reimbursement arrangements are tax-advantaged accounts that employers bankroll.

Last October, President Donald Trump directed HHS and two other agencies to consider new rules, within 120 days, expanding their availability. But the process has dragged on well past the deadline, suggesting difficulties fulfilling the directive.”