On June 13, 2019, the Departments of Health and Human Services, Labor, and Treasury issued a new final rule to expand the use of Health Reimbursement Arrangements (HRAs) by employers to fund premiums for their employees in the individual health insurance market. The final rule reverses prior federal guidance by allowing HRAs to be used to fund both premiums and out-of-pocket costs associated with individual health insurance coverage.

The new HRA rule does bring some benefits to the table. And, while it may take a bit of time to fully realize all them, here are some advantages Take Command Health has put together that we can expect to see right away:

• Flexibility — Everyone does NOT have to be treated equally across the board. An employer can choose to treat different classes of employees differently based on the 11 Individual Coverage HRA (ICHRA) classes proposed in the new law.

• Personalization — ICHRA is much more personalized and allows employees to choose their own plan, as opposed to an employer-sponsored health plan.

• Budget control — Unlike group plans and their creeping prices year-over-year, employers can choose a budget that works for them and stick with it. Not only that, employers have the option to roll over unused funds or reset to zero the following year. (Unused funds stay with the employer!)

• Employer mandate — ICHRAs can meet the employer mandate for employers with greater than 50 full-time applicable large employers (ALEs) if the offer is “affordable” and meets minimum value.

• Enrollment ease — Employers can choose to offer an ICHRA any time throughout the year. When an employer offers an ICHRA, the employee has 60 days to sign up for a marketplace plan as part of a special enrollment period, instead of having to wait until the annual open enrollment period.

While this new rule doesn’t take effect until January 1, 2020, it will be interesting to see if the market shifts soon. One of the things that might happen is that companies may want to “retreat” from the marketplace. If this is something you plan to look at, we do have a partnership with Take Command Health. This is a vendor that can assist with getting you out of the group market.

The Department of the Treasury has also put together a document that contains a lot of great information on some important questions. Check out the FAQ here.

If you have any other questions, we’d be happy to talk with you. Just reach out!