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Administration Acts on Health Reimbursement Arrangements
On October 12, 2017, President Trump issued Executive order 13813, “Promoting Healthcare Choice and Competition Across the United States,” to direct the U.S. Departments of Labor, Health and Human Services (HHS), and the Treasury to develop rules to expand association health plans (AHPs), short-term limited duration insurance, and health reimbursement arrangements (HRAs). This proposed rule pertains to HRAs only.
Achieving a significant legislative goal of the National Association for the Self-Employed.
The proposed rule sets parameters for employers to offer employees: 1) an HRA for the purchase of individual health coverage in lieu of a traditional group plan; and separately, 2) an HRA for excepted benefits coverage.
Under the proposed rule, an employer is permitted to offer a class of employees an HRA for the purchase of individual health coverage. However, the employer is not permitted to offer both the option of a traditional group health plan or an HRA for the purchase of individual health coverage to the same class of employees.
The proposed rule defines these eight classes of employees that employer can offer an HRA for the purchase of individual health coverage:
1. Full-time employees
2. Part-time employees
3. Seasonal employees
4. Collective bargaining agreement unit
5. Employees currently in a waiting period
6. Employees under age 25
7. Non-resident aliens with no U.S.-based income (foreign employees who work abroad)
8. Employees whose primary site of employment is in the same rating area
The proposed rule permits an employer to offer employees an HRA for excepted benefits. However, the proposed rule does not enable an employer to offer employees both an HRA for purchase of individual health coverage and an HRA for excepted benefits.
The NASE will submit comments on the Administration’s proposal in support of the ability of our members to offer HRAs.
Thank you to Horizon Government Affairs for providing resource materials