According to a new rule issued on Thursday by the Trump Administration, employers will be allowed to fund individual health plans for their workers. Previously, employers were allowed to fund health reimbursement accounts (HRAs) for workers to receive reimbursement for out-of-pocket medical expenses, but through this new rule, those HRAs can be used to purchase health insurance via an individual-market plan.
The rule will be in effect as of January 1st, 2020 and will allow opportunities for more than 11 million workers to have access to purchases individual health plans. Out of those 11 million workers, almost 800,000 of those workers will be newly insured. An estimated 800,000 employers are able to take advantage of this funding for their workers.
The rule under the Affordable Care Act is for companies that have 50 or more full time workers are required to provide those employees with health insurance. If those companies provide enough funding through their HRA contributions, they will meet the requirements under the ACA. The new rule enacted by the Trump administration contains provisions that will prevent employers from reducing the costs by having older and sicker employees going to individual markets in the ACA, which causes costs and premiums to heavily increase in those individual markets.
The health plans that can be purchased using the HRA funding must meet Affordable Care Act requirements. Employers also have the opportunity to create an “excepted benefit” HRA that can be used to purchase more affordable and shorter term plans that are not compliant with ACA requirements, which are capped at $1,800 a year.
Read the original article from Modern Healthcare here.