In October of 2017, President Donald Trump issued an executive order which was entitled “Promoting Healthcare Choice and Competition Across the United States.” The executive order instructed regulatory agencies to focus on three initiatives:
Under the Obama administration, the Internal Revenue Service (IRS) issued HRA guidance in Notice 2013-54. In this notice, the IRS took the position that many types of HRAs had to be integrated with a group major medical plan. Failure to be integrated with a group major medical plan would make the HRA subject to Affordable Care Act (ACA) market reforms, including the requirement to cover essential health benefits without any annual or lifetime dollar limits.
Many suspect the Trump administration is looking at legal ways to reverse or change the guidance that was included in Notice 2013-54. There is potential that new guidance could allow for integration with an individual major medical plan or the integration requirement may be eliminated altogether, but we have yet to see any proposed rules to know for certain.
If the integration requirement were to be more flexible or eliminated, that would free up the ability for employers to offer more types of stand-alone HRAs, including those that reimburse individual health insurance premiums. This may benefit small and medium size employers who find it too costly to offer a more traditional group major medical plan.
Unless and/or until new HRA guidance is issued, it’s unclear how this might benefit larger organizations who must comply with the Employer Mandate. That gets a little more tricky since applicable large employers have to offer coverage which is affordable and provides minimum to avoid the risk of penalties.