Earlier this week, the Trump administration finalized a rule to expand the use of Health Reimbursement Arrangements (HRAs). This proposal, which was released jointly by the Treasury Department, Labor Department, and Department of Health and Human Services (HHS), will promote employer flexibility and choice in the healthcare system.
This rule will allow employers to offer HRAs to their employers to purchase insurance as an alternative to employer provided care. HRA funds are tax free to both the employer and employee and funds roll over year to year.
More than 80 percent of employers currently offer their workers just one choice, and this rule will allow businesses more flexibility to offer their workers’ health insurance coverage. In fact, it is estimated that this new rule will help 11 million workers and 800,000 businesses.
By giving employees more control over their healthcare dollars, the HRA proposal should make healthcare costs more transparent and put downward pressure on wasteful healthcare spending.
HRAs will also compliment existing tools to expand healthcare choice as they can be used in conjunction with a Health Savings Account-qualified plan to pay for premiums, dental care and other expenses.
This new rule is just one of many positive proposals from the Trump administration to expand choice and access, a stark reversal to the top-down government control model of healthcare pushed under the Obama administration.
Last year, the administration released a rule that gave workers important flexibility to use short-term, limited-duration health insurance plans by allowing families and individuals to purchase plans for 12 months with a total of 36 months of renewability.
These plans are exempt from Obamacare’s costly mandates and regulations, meaning more Americans will have access to affordable and flexible healthcare. As a result, these plans are expected to be 50 to 80 percent cheaper and will offer millions of Americans flexible care after several years of increasing premiums and narrowing choices in the Obamacare marketplace.
The administration has also allowed small businesses to band together and form association health plans (AHP). AHPs are similarly exempt from many Obamacare regulations and give workers and employers increased flexibility to offer care.
While the left claims that the Trump administration is taking health care away from Americans, the reverse is true. The administration has a record of increasing choice and access, and the latest HRA proposal will only build on this record.