As part of our mission to promote education and awareness for health reimbursement arrangements and build upon HRAs to improve the stability and affordability of individual health coverage, industry and policy experts at the HRA Council publish regular commentary on the state of HRA legislation, adoption, and regulatory changes.

Our first August update is from HRA Advisor Brian Blase. In it, Brian provides briefings on regulatory stability and Premium Tax Credits (PTCs) as they relate to HRAs, plus a significant update on legislation introduced to give the 2019 HRA rule “the full force and effect of law.”

We also provide a digest of the most valuable and timely news on HRAs from diverse, trusted media. We provide this information for the benefit of our members in promoting and advocating for HRAs and to the general public for a better overall understanding of this health coverage innovation.

Regulatory stability

It’s mostly quiet right now on the ICHRA front. A January 28, 2021 executive order from President Biden caused some speculative overreaction that the administration might undo the 2019 rule creating ICHRAs. But such a regulatory lift would be very time-consuming for the new administration. Then and now, I believe revisiting the 2019 rule would not be high on the Biden administration’s health agenda, given all their other priorities. Certainly it’s possible the Biden administration will issue rules in the next year or so that would modify the 2019 rule, e.g. adjusting the guardrails, yet it is very unlikely that the Biden administration will look to rescind ICHRAs at this point. I believe that the Biden administration will look for data and information on ICHRA utilization and how ICHRAs are affecting the individual health insurance market. Our sources at CMS have told us that there isn’t much action, either positive or negative, related to ICHRAs.

PTCs and HRAs

The big policy news in Washington is related to the legislation that congressional Democrats may advance through the reconciliation process. The legislation would almost certainly contain health care policies, with a permanent expansion of Affordable Care Act subsidies being very likely. In March, Congress enacted the American Rescue Plan Act, which increased the size of the ACA’s premium tax credits (PTCs) and lifted the eligibility cap at 400 percent of the federal poverty level for 2021 and 2022. 

In my view, as well as those of several other policy experts, a permanent expansion of the premium tax credits may hurt the market for ICHRAs, as we anticipate expanded PTCs will result in more employers choosing not to offer any coverage, including ICHRAs. However, it’s very uncertain how large this impact will be, and the Congressional Budget Office only expects about two million fewer people with employer provided coverage if the expanded PTCs are made permanent. So, it might not be a significant effect. 

Below are some other developments and ICHRA-related news, including legislation introduced by several House Republicans to codify the 2019 HRA rule:

House Republicans Introduce Legislation to Codify the 2019 HRA Rule

On June 25, Rep. Dan Bishop (NC-09) reintroduced the Increasing Health Coverage through HRAs Act, which would give the 2019 HRA rule “the full force and effect of law.” While the HRA rule is law, it was put in place through administrative rulemaking, which means that it can be modified and potentially rescinded through future rulemaking. This legislation, if enacted, would make the 2019 HRA rules permanent by giving them the stamp of Congress. 

Joining Rep. Bishop as original cosponsors of this bill are Representatives Ted Budd (NC-13), Bruce Westerman (AR-04), Lloyd Smucker (PA-11), Ralph Norman (SC-05), Madison Cawthorn (NC-11), Troy Balderson (OH-12), Scott Perry (PA-10), Jody Hice (GA-10), Greg Steube (FL-17), and Yvette Herrell (NM-02). The legislation is supported by FreedomWorks, Americans for Prosperity, Americans for Tax Reform, National Taxpayers Union, Taxpayers Protection Alliance, Heritage Action, and the Faith and Freedom Coalition. 

The bill sponsors are emphasizing that the HRA rule will expand employer flexibility, employee options, and the Department of Treasury estimate of expanding coverage to 800,000 people. 

According to Rep. Bishop, “This bill is about giving Americans the freedom to choose their own health coverage. I am committed to promoting common sense policies that increase access to health coverage and lower costs for all North Carolinians. Allowing consumers to use their HRA to the purchase coverage on the individual market will increase access to health insurance while lowering costs and creating more choices for millions of Americans.”

HRAs in the News