Trump Announces New HRA RulesJune 19, 2019
On Friday, June 14, President Donald J. Trump held an event in the Rose Garden to announce the release of final rules that will ease restrictions on health reimbursement arrangements (HRAs) starting in 2020. HRAs will now allow employees to use pre-tax accounts to purchase insurance, even certain policies that don’t meet the Affordable Care Act’s (ACA) requirements.
Under the ACA, HRA’s were primarily restricted only to pay for medical expenses, not insurance plans. This rule will undo that Obama-era guidance that restricted HRAs for that purpose. While the new rule does not eliminate the employer mandate penalty, it will allow HRA funds to be used to pay for individual insurance premiums on the exchange or off the exchanges to satisfy the employer mandate, provided the HRA is deemed affordable.
Employers can contribute up to $1,800 per year in an employee’s HRA account however employees cannot contribute to HRAs. The money employers put in the accounts is tax-free to workers and tax-deductible for the company. The administration estimates the rule will expand health coverage by about 800,000 people.
Surrounded by small-business owners, Trump said, “This announcement is a monumental victory for small businesses, for their workers and previously uninsured Americans who will now have access to high-quality health plans of their choice.”
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