Trump touts administration's expansion of HRAs as win for small business

Donald Trump

Donald Trump

The administration expects small businesses will be the biggest benefactor of the rule, which will take effect in 2020.

"This new rule is another example of President Trump delivering on his promise to provide more affordable healthcare options to the American people".

President Donald Trump on Friday announced a new government rule allowing businesses an alternative to providing workers with a company-administered health insurance plan.

It is hoped that this new rule will stop the steady 10-year decline of small businesses not offering any health insurance to their employees and help those employers that offer only one type of plan to their employees, enabling them to provide more choices instead.

Some critics say HRAs could allow employers to come up with strategies for shifting workers with high health care costs off their company plans and into the market for individual policies, although the administration says it has acted to head that off.

On a call with reporters Thursday, White House officials said expanding HRAs would also pay off for insurers, as it would lead to more people seeking coverage on the individual marketplaces.

Trump is expected to discuss a new rule that allows more employers to reimburse their workers for qualified medical and dental expenses using accounts that are not subject to federal income and payroll taxes.

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Over the last decade, a significant number of small businesses that were offering health insurance to their employees have stopped offering it.

This HRA rule will be a major boost for small- and mid-sized businesses across the United States and provide more flexibility for employers and workers. Since 2003, there has been an nearly 30 percent drop in health insurance offer rates at companies with fewer than 100 employees.

"The HRA final rule offers millions of American workers more health coverage choices and portability", Labor Secretary Alex Acosta said in a media release.

"There are some employers who would like to offer their employees health coverage, but the requirements have become so extensive or the cost has become so high, that they aren't able to", Alexandra Campau, a former special assistant for health policy to President Trump, told the Journal.

"The rule will significantly expand worker options, since 80% of firms that provide insurance now offer only one type of plan", Blase said.

Almost 2 million people who would have otherwise been uninsured are expected to gain insurance thanks to the new HRA rule and expanded AHPs and short-term plans.

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