New Health Options for Small Firms 10/23 06:25
The Trump administration is rolling out new options for small employers to
use tax-free accounts for providing health coverage to workers, officials said
WASHINGTON (AP) -- The Trump administration is rolling out new options for
small employers to use tax-free accounts for providing health coverage to
workers, officials said Monday.
The idea is to expand so-called "health reimbursement arrangements" to allow
employees to buy their own individual health insurance policies.
Employers could also pair the accounts with workplace health plans, allowing
workers to use the money for additional benefits such as dental care.
Officials from the departments of Treasury, Labor, and Health and Human
Services provided a broad overview of the proposed regulations Monday evening
ahead of an official announcement, expected Tuesday.
Critics say the approach will undermine traditional job-based coverage.
HRAs join other Trump administration health insurance initiatives, including
association health plans and short-term policies.
The latest changes appear to be complex and it could take time for employers
to them sort out.
Officials said the proposal is aimed at two types of companies: small firms
that are not required to offer health insurance and medium-sized firms that
usually only offer their workers a single plan.
The biggest change involves expanding the use of tax-free HRAs to allow more
workers to buy their own health insurance, a practice the Obama administration
had discouraged. The money employers put in the accounts is tax-free to workers
and tax-deductible for the company. Officials say the move will bring more
consumers into the individual health insurance market and promote competition.
But critics say HRAs could allow employers to devise strategies for shifting
workers with high health care costs off their corporate plans and into the
market for individual policies. The administration says its plan includes
protections for workers.
Administration officials said they hope the plan will lead to more people
getting health insurance, particularly in small companies that tend not to