While at least one of its proposals is ill-advised, most of this administration’s changes have helped expand consumer choice or reduced costs at least at the margins. The departments of Treasury, Labor, and Health and Human Services jointly finalized a rule Friday that could do both.
“Under the rule, starting in January 2020, employers will be able to use what are referred to as individual coverage [health reimbursement arrangements] to provide their workers with tax-preferred funds to pay for the cost of health insurance coverage that workers purchase in the individual market,” according to the joint press release. “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.”
And, in further explanation: “Over the last decade, a significant number of small businesses have stopped offering any health insurance to their employees. As a result, a smaller percentage of Americans working in small businesses are being covered by employer health benefits, and many are left uninsured. ... The HRA rule makes it easier for small businesses to compete with larger businesses by creating another option for financing worker health insurance coverage.”
Workers will gain greater choice and portability of insurance, while getting tax advantages like those enjoyed by people with traditional policies typically provided by larger employers.
