OFFERING WORKERS BETTER COVERAGE: President Donald J. Trump is expanding Health Reimbursement Arrangements (HRAs), opening new coverage options for American workers.
- The Trump Administration has finalized a rule to expand HRAs, giving businesses a better way to offer health insurance coverage.
- Under the rule, employers will be able to provide their workers with tax-preferred funds to pay for the cost of health insurance coverage that workers purchase in the individual market.
- This rule will particularly benefit small businesses that face significant costs in offering a traditional group health plan and businesses that do not currently offer coverage.
- The rule corrects a major distortion by, in effect, providing the same tax benefits to these new HRAs that are provided today to traditional employer-sponsored plans.
- The Administration expects that 800,000 employers will offer these new HRAs to more than 11 million employees and family members once employers fully adjust to the rule.
- 800,000 Americans who would otherwise be uninsured are projected to gain coverage.
- Under this rule, workers will be better able to shop for plans in the individual market and select coverage that best meets their and their families’ needs.
- More people obtaining coverage from the individual market should spur increased competition among insurers and help deliver better coverage options to consumers.
- Employers will be able to offer compensation arrangements that many workers will prefer, meaning that over time the rule could boost work and the overall economy.
- Businesses will also be able to offer a new excepted benefit HRA that workers can use to pay for medical expenses even if they opt out of the employer’s traditional group health plan.
EXPANDING AFFORDABLE COVERAGE: Many businesses have struggled with the high costs and complexity of health insurance, leading to less coverage and fewer options for workers.
- Over the last decade, a significant number of small businesses that were offering health insurance to their employees have stopped offering it.
- 80 percent of employers that offer coverage only provide one type of health plan to their employees, leaving workers no choices and plans that may not meet their needs.
- In recent years, more workers who are offered a health plan are opting out.
MORE OPTIONS, LOWER COSTS: President Trump has made it a priority to deliver more health coverage options and lower healthcare costs to Americans.
- President Trump is working to expand association health plans (AHPs), which make it more affordable for small businesses to provide health insurance to their employees.
- Some AHPs show up to 30 percent savings on premiums.
- The President took action to expand short-term, limited-duration plans, increasing choices for Americans facing high premiums and creating flexible options that fit their needs.
- The premiums for these plans can cost less than half the cost of Obamacare premiums.
- Americans will receive $45 billion of annual benefit from the expansion of these plans plus the individual mandate penalty removal, according to the Council of Economic Advisers.
- Nearly 2 million people who would have otherwise been uninsured are expected to gain insurance thanks to the new HRA rule and expanded AHPs and short-term plans.