A proposal to lift a prohibition on allowing companies to take advantage of health reimbursement arrangements (HRA) dating back to the Obama administration is slated to reshape employee-based healthcare.
Announced Tuesday, the expansion of HRAs would enable employers to use them to pay for health insurance premiums, allowing employees to purchase their own policies. The proposal aims to create a ”
tax-preferred” option for companies when funding healthcare coverage for their employees, although funded by the employer, the employee would essentially own the coverage.
In a press release, Steven Mnuchin, U.S. Secretary of the Treasury commented on the potential legislation; “Today’s proposed regulations will expand the availability of affordable health insurance for hardworking Americans.” He added,
This fulfills the commitment the President made in his October 2017 Executive Order to foster competition and choice and to provide Americans – especially employees who work at small businesses – with more options for financing their healthcare. Treasury projects that this will benefit hundreds of thousands of employers and millions of workers.
The Affordable Care Act banned the use of HRAs to buy plans on the individual exchange. Preliminary estimates from the Department of the Treasury claim that once familiar with the new rule, approximately 800,000 employers are expected to provide HRAs, meaning health insurance coverage for 10 million.
A former member of the Obama administration was oddly (considering the midterm election heat) on-board with President Trump’s proposal; John Barkett, who served in Obama’s Office of Health Reform, told Health Leaders Media:
“What leapt off the page for me after reading the proposal was how much they cared about protecting the individual market from adverse selection.”
Read the full press release on the Department of Labor’s site.
For the 209-page proposal, click here.
Check out CNN’s coverage of the news,
Or take a look at The Hill’s article for more insight.