More health care choices. Robert Moffit writes:
The Trump administration unveiled this week a final rule that will dramatically improve workers’ ability to access health insurance of their choice.
The new rule will significantly expand the permitted uses of tax-advantaged health reimbursement accounts, or HRAs.
Today, these special employer-based accounts, in which funds can be rolled over year to year, are used by employees to cover medical expenses, including out-of-pocket costs and services uncovered by traditional insurance.
But with this rule, for the first time in the history of these tax-free accounts, the administration would allow employees to use them to pay premiums for individual health insurance. […]
The greatest impact of the Trump administration’s change to the existing health reimbursement account regulations is the liberalization of the federal tax treatment of health insurance.
Under current law, employers and employees enjoy unlimited tax relief for the provision and purchase of health insurance—but if, and only if, that insurance is provided under the conventional umbrella of employer-sponsored group coverage.
For the many small businesses that cannot afford to offer such coverage, many workers and their families, deprived of any individual tax relief to offset their health insurance costs, face the dilemma of either buying inordinately expensive individual coverage on or off the Obamacare exchanges or going without any coverage at all.
By extending the federal tax advantages of traditional group health insurance coverage to health reimbursement accounts for the purchase of individual insurance, the Trump administration rule would give employers who do not, or cannot, offer job-based coverage the chance to help their workers and their families with their premium costs.
There is no cap on the employers’ tax-free contributions; they can give as much as they wish to help their workers.
The rule, in effect, allows for an employer-based defined contribution for health insurance, precisely the kind of financing mechanism that could spur a resurgence in consumer choice, personal ownership of portable health plans, increased plan participation, and robust competition in the nation’s health insurance markets.
[Robert Moffit, “Trump’s Expansion of Health Reimbursement Accounts Improves Health Care Choices,” The Daily Signal, June 14]
