Last Friday, NAHU submitted comments to the Departments of Labor, Treasury and HHS on the proposed rule on the expansion of Health Reimbursement Arrangements. The Trump Administration proposes allowing employers to offer an HRA to be used to purchase individual health coverage. NAHU noted our support of prohibiting employers from providing these plans in competition with other comprehensive group coverage, and advocated for clarification on numerous issues, as well as for simplification that will reduce the compliance burden on employers.
The proposed rule was created in response to an executive order issued by President Trump on October 12, 2017, directing federal agencies to expand the availability of HRAs, association health plans and short-term plans. The rules on AHPs and STPs were finalized last year. The HRA proposal would establish new parameters to allow employers to offer an HRA to be used for the purpose of purchasing individual health coverage in lieu of a traditional group health plan, and separately for an HRA to be used for excepted benefits coverage.
In our comments, we:
• Strongly support the decision to limit these plans to being the only plan choice for a class of employees and prohibiting employers from providing them in competition with other comprehensive group coverage.
These comments were on a proposed rule which has not taken effect, so compliance with current HRA regulations are to be enforced. The agencies will review all comments submitted by interested parties, and are expected to release a final rule later this year. The earliest implementation date would be January 1, 2020. NAHU will continue to provide guidance and updates on the progress of this rulemaking.
• Recommended establishing a safe harbor for employers to rely on to refer their employees to independent licensed advisors and other individual coverage resources without veering into group health plan territory.
• Recommended simplifying the employer verification requirements, developing more guidance and resources for employers, and creating more explicit rules and safe harbors.
• Asked the Departments to consider adopting a requirement for issuers similar to the creditable coverage letter requirement that was in place after the enactment of HIPAA and eliminated after the implementation of ACA market requirements in 2014.
• Recommended the Departments reconsider the policy that provides employers flexibility to create combinations of classes concerning the scope of the coverage offering, and instead provide a concrete list of categories of employees that must be used to determine the scope of an HRA-IHIC offering.
• Specify that an employer may choose to provide HRA-IHIC offerings to all of its employees or for any reasonable category of employees, provided it does so in a uniform and consistent basis for all employees in a class.
• Recommended that the final rule contain one set of clear definitions of these terms for employers to adopt for "full-time employee," "part-time employee" and "seasonal employee."
• Expressed concerns that timing of an opt-out coupled with exchange-based individual coverage enrollment could pose challenges for individuals who do not understand their opt-out or special enrollment rights or might not be informed of them adequately.
• Suggested potential for discrimination concerns with new HRA offerings to be made to some, but not necessarily all, former employees, as well as how this proposed option would work with Medicare-eligible former employees.
• Related concerns and questions about the various safe harbors proposed to help applicable large employers demonstrate that potential HRA-IHICs meet the “affordability” and “minimum value” tests.
• Expressed concern about participation requirement conflicts if an employer elects to offer an HRA-IHIC to one or more classes of employees and a traditional group health plan to one or more other classes.
• Requested clarification on the impact of the rule on individual-market risk pools and the potential for discrimination based on health status.
• Noted that the rule could lead to a downgrade in the scope of employer-sponsored coverage offerings in specific industries as certain employers may make de minimis contributions to HRA-IHICs to meet their IRC §4980(h) obligation to offer MEC.
• Opposed the ability for these plans to reimburse individuals for the purchase of short-term limited duration insurance coverage (STLDI).
• Requested clarification about the appropriate treatment of Medicare-eligible employees who are part of an employment class eligible for an HRA-IHIC, and the intersection of the HRA-IHIC provisions of the proposed rule and the Medicare secondary payer and nondiscrimination rules, both for traditional Medicare beneficiaries and those with Medicare eligibility due to a disability or end-stage renal disease.
• Supported the expanded flexibility on the selection and use of EHB benchmark plans but requested additional guidance on its parameters for self-funded group health plans.