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OFFERING WORKERS BETTER COVERAGE: President Donald J. Trump is expanding Health Reimbursement Arrangements (HRAs), opening new coverage options for American workers.

  • The Trump Administration has finalized a rule to expand HRAs, giving businesses a better way to offer health insurance coverage.
  • Under the rule, employers will be able to provide their workers with tax-preferred funds to pay for the cost of health insurance coverage that workers purchase in the individual market.
  • This rule will particularly benefit small businesses that face significant costs in offering a traditional group health plan and businesses that do not currently offer coverage.
    • The rule corrects a major distortion by, in effect, providing the same tax benefits to these new HRAs that are provided today to traditional employer-sponsored plans.
  • The Administration expects that 800,000 employers will offer these new HRAs to more than 11 million employees and family members once employers fully adjust to the rule.
    • 800,000 Americans who would otherwise be uninsured are projected to gain coverage.
  • Under this rule, workers will be better able to shop for plans in the individual market and select coverage that best meets their and their families’ needs.
    • More people obtaining coverage from the individual market should spur increased competition among insurers and help deliver better coverage options to consumers.
  • Employers will be able to offer compensation arrangements that many workers will prefer, meaning that over time the rule could boost work and the overall economy.
  • Businesses will also be able to offer a new excepted benefit HRA that workers can use to pay for medical expenses even if they opt out of the employer’s traditional group health plan.

EXPANDING AFFORDABLE COVERAGE: Many businesses have struggled with the high costs and complexity of health insurance, leading to less coverage and fewer options for workers.

  • Over the last decade, a significant number of small businesses that were offering health insurance to their employees have stopped offering it.
  • 80 percent of employers that offer coverage only provide one type of health plan to their employees, leaving workers no choices and plans that may not meet their needs.
  • In recent years, more workers who are offered a health plan are opting out.

MORE OPTIONS, LOWER COSTS: President Trump has made it a priority to deliver more health coverage options and lower healthcare costs to Americans.

  • President Trump is working to expand association health plans (AHPs), which make it more affordable for small businesses to provide health insurance to their employees.
    • Some AHPs show up to 30 percent savings on premiums.
  • The President took action to expand short-term, limited-duration plans, increasing choices for Americans facing high premiums and creating flexible options that fit their needs.
    • The premiums for these plans can cost less than half the cost of Obamacare premiums.
  • Americans will receive $45 billion of annual benefit from the expansion of these plans plus the individual mandate penalty removal, according to the Council of Economic Advisers.
  • Nearly 2 million people who would have otherwise been uninsured are expected to gain insurance thanks to the new HRA rule and expanded AHPs and short-term plans.