The Trump Administration has issued a new Executive Order requiring the Departments of Labor, Treasure, and Health and Human Services to issue new guidance and proposed regulations that would disclose negotiated rates, cost-of care, and de-identified federal healthcare data. The Executive Order also seeks to expand the availability of Health Savings Accounts (HSAs).
The order does not implement any new federal policies at this time, but simply gives specific instructions to the agencies to develop regulatory guidance.
Some of the provisions contained in the Executive Order directs federal agencies to issue guidance that would:
-Require hospitals to disclose information about negotiated rates in a format that is understandable and usable by patients and consumers.
-Require insurance companies to provide patients with information about the cost of their care, including out-of-pocket costs before they receive services.
-Develop a comprehensive roadmap for consistent, limited, and consumer-centric quality metrics.
-Expand the availability and use of HSAs to cover direct primary care arrangements and healthcare sharing ministries. It also seeks to include more preventative services that can be covered in the deductible period.
-Issue guidance on the number of funds that can be carried over at the remainder of the year for FSAs.
This is the third Healthcare executive order issued by the Trump Administration. The order does not immediately trigger any new regulations other than directing agencies to develop new regulatory actions. The process will now go through rule making procedures which includes coming up with a proposed rule, then allowing for a comment period and eventually, enactment of a final rule.
FINAL RULE RELEASED ON HRAs
On June 13th, 2019, the Departments of Labor, Health & Human Services and Treasure, released the final rules concerning Health Reimbursement Arrangements. (HRAs)
The 497 page rule includes the creation of 2 new types of HRAs, the “Individual Coverage HRA” and the “Excepted Benefit HRA”
Among more notable advantages of the Individual Coverage HRA include, but are not limited to:
-Funds can be used to reimburse the employee’s premiums for an individual health insurance policy
-Reimbursements made to employees do not count towards the employee’s taxable wages.
-Employer can choose to roll-over unused amounts into the following year.
-Coverage can be offered to different classes of employees, i.e. full-time, part-time, seasonal, employees in the same geographic location, salaried, hourly.
-An offer of the Individual Coverage HRA represents an “offer of coverage” under the employer mandate however contributions must meet affordability guidelines. (The IRS will release further guidelines regarding this at a later date)
The Individual Coverage HRA comes with some restrictions & regulations including, but not limited to”
-An offer of an Individual Coverage HRA cannot be made to any employee that you offer a traditional group health plan to.
-If an offer of coverage is made to a class of employees, there is a minimum class size that is required. (Usually 10% of that specific class of employees. For example, if an employer has 200 employees, a minimum of 20 employees would have to be in a specified class)
-Contributions can be whatever the employer chooses, but they have to be consistent for all employees in that specified class.
-Employer must provide notice of the Individual Coverage HRA to employees.
-Employer must be able to substantiate that the employee is enrolled in an individual plan or Medicare (model notices are available).
-Employer must notify employee on an annual basis that the individual health insurance is NOT subject to ERISA.
The final rule also created the “Excepted Benefit HRA” which, starting in January of 2020 will permit employers to finance additional medical care. Employees can use these HRAs and they do not have to be enrolled in the group’s traditional health plan.
The requirements associated with the “Excepted Benefit HRA” include, but are not limited to:
-Annual contribution is capped at $1,800.
-Must be offered in conjunction with a group health plan but there is no requirement for the employee to enroll in that plan.
-The “Excepted Benefit HRA” cannot be used to fund group health or Medicare premiums.
-It can fund premiums for dental, vision or short term limited duration insurance.
Employers who want to offer the “Individual Coverage HRA” for January 1, 202 can do so but employees will need to enroll in an individual plan during the 2019 open enrollment period. (November 1st, 2019 December 15th, 2019).
Cosmo Insurance Agency is an independent insurance agency serving surrounding communities in New Jersey. Cosmo keeps its promise to assure an efficient and creative approach to the services we offer. Each of our clients experience a personalized and long-term relationship with us. Our New Jersey based team of health brokers guides our clients in helping them choose the most cost-effective options. By incorporating the latest in technology-based tools and laws on healthcare, employee benefits, life insurance and finance, we keep our clients up-to-date with the plans that encompass all of their needs, whether it is individual or group insurance.
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