Trump Administration Plans to Revamp Employer-Based Health Care

The Trump Administration is set to roll out a new policy that could reshape how employers offer insurance coverage.

The proposal would allow companies to use HRAs to reimburse employees’ premiums on the individual health-insurance market up to $1,800. The new policy would apply to small- and medium-sized companies that currently do not offer health insurance coverage to employees, administration officials said.

The proposal is the third part of President Trump’s executive order on ObamaCare and insurance competition from last fall. Two other policies from the order have already been made final: expanding the duration of non-ObamaCare short-term insurance plans, and allowing for employers to form association health plans.

HRAs allow workers to purchase coverage using tax-free dollars. Currently, an HRA can only be used to reimburse an employee or dependents for certain qualified medical expenses.

The new proposal aims to loosen these restrictions, and would allow employees to purchase insurance that doesn’t have to meet ObamaCare’s requirements.

According to the officials, expanding access to HRAs would add an additional 7 million people to the individual market over the next ten years.

The expanded HRA policy will have “guardrails,” officials said. For example, employers will have to provide either an HRA to purchase coverage or traditional employer-sponsored health plan, but not both.