September 28, 2012
This week, the Wall Street Journal ran a story about some large employers who are now considering providing employees access to health insurance through private health insurance exchanges, a topic which HR Policy members and staff spent considerable time discussing earlier this month at the Association’s Washington Policy Conference. While the Affordable Care Act exchanges are not currently open to large employers, the Association staff described the potential benefits of pooling their employees and providing fixed contributions through a health reimbursement arrangement (HRA) to purchase insurance in private exchanges. With private exchanges, employer involvement in health care administration would be generally limited to providing access to the exchanges and complying with the minimal administrative requirements of funding HRAs. However, while some employers may find the private exchange option attractive, more regulatory guidance is needed to confirm that such an approach does not violate the ACA’s prohibition on annual limits or trigger the Act’s employer penalty. These critical but unresolved issues have given many large employers pause as they reconsider how best to deliver health care to their active employees, dependents, and retirees.