ACA premium fears add pressure to self-employed health-care planning

These are employer-sponsored plans in which allow the employer to reimburse the employee for certain types of health-care expenses on a tax-free basis. Currently, they are not portable, meaning if someone leaves their job, they stay with the employer.

Trump’s executive order aims to “increase the usability of HRAs to expand employers’ ability to offer HRAs to their employees in addition to to allow HRAs to be used in conjunction with nongroup coverage.”

This specific means the employer could potentially give money to employees in an HRA so the employee could buy health coverage on his or her own, Solomons said. “For employers with more than 50 employees, a HRA will be a great way to help employees fund part of a high-deductible health plan’s large deductible using the savings recognized by the lower premiums,” he said. “Actuarially, we know in which not all employees will need to utilize the money available within the HRA, so for the employer the item’s a great way to make available a specific benefit (i.e. funding part of the high deductible) to all [while only funding] for those who actually incur claims against their deductible.”

Currently, to have an HRA, the employer must offer — or the employee must be enrolled in — health insurance, either with the employer or with their spouse. The president’s directive would certainly further expand the item to allow the employee to be covered under an exchange or individual policy, as well.

Prior to Trump’s executive order, employers not offering ACA-approved group health insurance however instead offering a smaller employer HRA could be fined up to $100 a day, Solomons said.

HRAs differ through the current Qualified smaller Employer Health Reimbursement Arrangement (QSEHRA), which was resurrected at the beginning of 2017 to allow for reimbursement payments to employees who purchased individual health insurance on the exchange because their employer had less than 50 employees in addition to did not offer group health insurance. Currently, maximum employer contributions for these are limited to $4,950 for employee-only coverage in addition to $10,000 for family coverage. The standard HRA has no contribution limit.

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