On Thursday, the Department of Health and Human Services announced a final regulation that allows businesses to fund employees who buy health insurance on the individual market–something that until now has been illegal.
Today, the U.S. Departments of Health and Human Services, Labor, and the Treasury issued a new policy that will provide hundreds of thousands of employers, including small businesses, a better way to provide health insurance coverage, and millions of American workers more options for health insurance coverage. The Departments issued a final regulation that will expand the use of health reimbursement arrangements (HRAs). When employers have fully adjusted to the rule, it is estimated this expansion of HRAs will benefit approximately 800,000 employers, including small businesses, and more than 11 million employees and family members, including an estimated 800,000 Americans who were previously uninsured.
Under the rule, starting in January 2020, employers will be able to use what are referred to as individual coverage HRAs to provide their workers with tax-preferred funds to pay for the cost of health insurance coverage that workers purchase in the individual market, subject to certain conditions. … Individual coverage HRAs are designed to give working Americans and their families greater control over their healthcare by providing an additional way for employers to finance health insurance.
The HRA rule also increases workers’ choice of coverage, increases the portability of coverage, and will generally improve worker economic well-being. This rule will also allow workers to shop for plans in the individual market and select coverage that best meets their needs. … [T]he final rule should spur a more competitive individual market that drives health insurers to deliver better coverage options to consumers.
The new rule will empower employees to select individual coverage that best meets their families’ needs, and should contribute to revitalizing the insurance market that was devastated by Obamacare.
This is a good example of how the Trump administration is moving forward in practical ways on important issues, empowering consumers and freeing up markets. The Democrats don’t like it, of course; Politico parrots their objections here. But the new HRA system will be popular with millions of Americans whose ability to access the individual market and exercise consumer choice will be enhanced.
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