A New HRA Update Falls In!
Proposed Changes and What You Need to Know Now
It’s election season. It’s open enrollment season. It’s fall. The air is crisp, the leaves are turning, and you’re likely so busy that you didn’t even notice. You know what that means, right? It’s the perfect time to drop some new ACA regulations out of the clear blue sky. I know, I know – you really enjoy 200+ pages of new rules on a Thursday, don’t you? Let’s get to it, shall we?
On October 23, 2018 new proposed regulations were published by the Trump administration that expands the role of Health Reimbursement Arrangements – or HRAs – in the employer marketplace. These new rules, which are still proposed and cannot be relied upon by employers yet, mark a significant change in stance from the Obama administration, and modify HRAs into a distinctly different benefit than they currently represent.
You may not be familiar with HRAs – in a nutshell, they are employer-funded accounts that started as a way to reimburse employee out-of-pocket medical expenses. Basically, they were a precursor of Health Savings Accounts. Technically, they are also self-funded group health plans. Once the ACA became law, many regulations were issued that limited HRAs to make them conform with various ACA requirements.
However, the Trump administration now views them as a way to give employers – especially small employers – additional options to provide coverage to their employees. In this case, the new rule proposes to modify HRAs such that they could reimburse premiums employees pay for individual, instead of group, health insurance, subject to a host of requirements.
What’s important right now is not to focus on all the requirements, as they’re all subject to public comment and will likely change as various industry and corporate entities evaluate the rules and offer suggestions and improvements. What's important to know for now is that none of these options will be available until 2020 at the earliest, and that implementing an HRA at that point will require some serious tradeoffs that many employers probably won't be completely comfortable with. Group health plans and individual health plans can have some significant network and benefit differences, for instance, and the need for employee education on the differences will be a key factor.
So, for now, enjoy that Pumpkin Spice Latte, get on with open enrollment, vote in November, root for your favorite teams, and we’ll get back to you next year on this. A lot can change between now and when the new Congress gets to work early next year. We’ll keep our eyes on this and update you as needed.
As always, if you have any questions don’t hesitate to reach out to your Assurance representative!
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