Administration Rule Expands Use of Health Reimbursement Arrangements
- The Trump Administration issued a final rule that permits employers to use health reimbursement arrangements (“HRAs”) to reimburse their employees for health insurance plan premiums.
- HRAs are a type of account-based health plan that employers can use to reimburse employees for their medical care expenses. As announced by the administration, the goal for the rule is to expand options for financing workers’ health insurance coverage, especially for mid-sized and small-sized employers. The administration anticipates this expansion of HRAs will benefit approximately 800,000 employers and more than 11 million employees and family members, including an estimated 800,000 Americans who were previously uninsured.
- Starting in January 2020, employers will be able to use what are referred to as individual coverage HRAs to provide their workers with tax-preferred funds to pay for the cost of health insurance coverage that workers purchase in the individual market. The rule also allows employers with employer-sponsored coverage to offer HRAs of up to $1,800 per year to reimburse certain qualified medical expenses.
- The content of such rules are not finalized until their publication in the Federal Register. This rule is expected to be published on June 20.
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Brian F. Higgins is an associate in FBT's regulated business group with a focus on health care, and he has a history as corporate counsel to Medpace, Inc., a pharmaceutical clinical research organization.