New federal rule expands health insurance options
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Published: 19-Jul-2019


In June, the Trump administration finalized an executive rule  change that could offer more health insurance options to millions of Americans by expanding the flexibility of Health Reimbursement Arrangements (HRAs).

HRAs are employer-funded arrangements that allow employees to pay for their personal medical expenses with tax-exempt funds. 

Starting next January, workers will also be able to use funds in their HRA to buy individual health insurance coverage for themselves and their families; this was barred under previous administrative rules. (https://www.hhs.gov/about/news/2019/06/13/hhs-labor-treasury-expand-access-quality-affordable-health-coverage.html )

The White House projects President Trump’s rule change will help 11 million workers (https://www.cnn.com/2019/06/13/perspectives/hra-health-care-business-trump/index.html ) and family members purchase insurance on the individual market using HRA funds within the next five years.
This administrative ruling is a part of President Trump’s efforts to offer more affordable choices to consumers in the health insurance market while still staying within the limits of the Affordable Care Act. In the months prior to this rule change, Trump scaled back regulations onshort-term (https://www.ocpathink.org/post/more-choices-more-savings-short-term-health-insurance ) health plans and association health plans (https://www.ocpathink.org/post/president-trump-scales-back-obamacare-regulations-expanding-health-insurance-choices ) (AHPs), aiming to expand options for health insurance and to save consumers money.

According to a recent report (https://www.whitehouse.gov/wp-content/uploads/2019/02/Deregulating-Health-Insurance-Markets-FINAL.pdf ) from the Council of Economic Advisers, these regulatory changes to AHPs and short-term plans, in conjunction with eliminating the individual-mandate health insurance penalty, could “generate benefits to Americans that are worth an estimated $450 billion over the next 10 years.”
Brian Blase, special assistant to the president on the National Economic Council, expects this new expansion of HRAs will help people obtain more affordable health insurance coverage in the individual market. “The HRA rule may increase the size of the individual market by upwards of 50 percent, and should spur a more competitive market that drives insurers to deliver better options to consumers.”

As premiums for covered workers continue to rise (https://www.kff.org/health-costs/report/2018-employer-health-benefits-survey/  ), HRAs could be an alternative option for small businesses in Oklahoma who want to offer health insurance benefits but do not yet have the resources to afford an expensive group plan.

NOTE:  Finley is a policy research fellow for the Oklahoma Council of Public Affairs (OCPA) in Oklahoma City. Reposted with permission, this report first appeared at the OCPA website (https://ocpathink.org/post/new-federal-rule-expands-health-insurance-options). 

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