President Donald Trump signed an executive order on Oct. 12 directing the Departments of Labor, Health and Human Services and the Treasury to review regulations issued under the Affordable Care Act (ACA) and to explore ways to:

  • Expand rules for association health plans (AHPs) to allow more employers to ban together and purchase health care plans, including across state lines.
  • Create rules that allow employees to use health reimbursement arrangement (HRA) funds to pay for health care premiums, for plans employees purchase on the individual market, such as through the ACA's Marketplace exchanges.

The order also requests that federal agencies look to revise existing ACA regulations to allow individual and small-group market plans that don't adhere to all of the ACA's health coverage requirements.

The rule revisions could potentially allow workers to use HRA funds to pay premiums on health plans purchased in the individual market. Currently, only small businesses with fewer than 50 full-time employees can provide stand-alone HRAs that may be used for this purpose, as long as certain conditions are met.

"Many employers were upset when the Obama administration shut down the ability for employers to just provide money on a pretax basis for employees to purchase their own health insurance on theopen market—a trend that many saw as the wave of the future," said Brian Pinheiro, chair of the employee benefits group at law firm Ballard Spahr in Philadelphia.

"There was a fear that employers may simply offer a basic HRA instead of comprehensive health care coverage," Tacchino explained. "They would then contribute a certain dollar amount, allow the employer to make its pretax contribution to an HRA rather than sponsor a health care plan, and then let the employee use these funds to purchase health care on the open market."

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