Trump speaks in Rose Garden on health care

The Trump Administration's Newest Health Care Rule Could Shake Up Small Business Benefits Nationwide

The Trump Administration's Newest Health Care Rule Could Shake Up Small Business Benefits Nationwide

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.

Chad Brooker, associate principal at Avalere Health consultants, said the final rule "underscores the administration's focus on granting employers and individuals enhanced flexibility, including tax-advantaged account-based benefits".

Mr. Trump is discussing expanding coverage through health reimbursement arrangements (HRAs), which are employer-funded group health plans which reimburse employees tax-free for qualified medical expenses, up to a fixed dollar amount per year.

The Trump White House said that the rule would help small and medium-sized businesses offer health insurance to their employees. Sign up today to get healthcare news and updates delivered to your inbox and read on the go.

Due to inaction by congressional Republicans, particularly in the Senate, after promising for seven years to repeal and replace the Patient Protection and Affordable Care Act (ACA), or Obamacare, the Trump administration has undertaken several initiatives to fix the individual health insurance market that had been severely damaged.

This rule will particularly benefit small businesses that face significant costs in offering a traditional group health plan and businesses that do not now offer coverage.

The HRA accounts join short-term health insurance and association health plans as the Trump administration's answer to high health insurance premiums.

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.

"I think that really opens the doors for a lot of employers to think about doing this", he said.

In less than six months, small business employees could have some of the same health insurance tax benefits as workers at large corporations. It will allow employers to use tax-exempt HRAs to give workers funds to buy health insurance in the individual market. Employees can't put their own money into the accounts.

"The HRA final rule offers millions of American workers more health coverage choices and portability", Labor Secretary Alex Acosta said in a media release. "HRAs will allow American workers to shop for the plan that's right for them and their family and have their employer cover the cost".

"This is a brand new option for employers considering the best way to provide health insurance for their employees", he said.

The new accounts will start to become available next January 1.