HR Policy Seeks Greater Flexibility in Health Reimbursement Account Proposal

January 11, 2019

HR Policy submitted comments on the Trump administration’s proposed rule that would allow health reimbursement accounts (HRAs) to be used under certain conditions to purchase coverage in the individual market and effectively provide a defined-contribution option for employer-provided health care benefits.

The Association’s comments recommended the final rule should:

  • Not prohibit employers from offering both an integrated HRA and a traditional health plan to the same class of employees, since two other provisions in the proposal are more than sufficient to mitigate the risk of market segmentation and health factor discrimination;

  • Permit plan sponsors to treat salaried and hourly employees as different classes of employees in addition to the 8 other classes of employees in the proposal, which include full-time, part-time, seasonal employees, and collective bargaining; and

  • Implement verification that employees are using the HRA to enroll in individual coverage in the least burdensome way.

Outlook:  The new House majority may hold hearings on the proposal.  A final rule is not expected until the end of 2019 and will likely be challenged in court.