SAF has advocated for the implementation of both Association Health Plans and Health Reimbursement Arrangements.
President Trump signed an executive order last week to allow employers to participate in Association Health Plans (AHPs) and offer employees Health Reimbursement Arrangements (HRAs). The order is intended to increase health insurance options and promote competition, according to the White House.
AHPs would allow small business owners to join together through trade and professional associations to purchase health insurance for themselves and their employees.
“AHPs could be less expensive than plans mandated under the Affordable Care Act (ACA) because they would not be required to include many services and comprehensive coverages required under the ACA,” explained Shawn McBurney, the Society of American Florists’ senior director of government relations, who noted that SAF’s history of supporting AHPs predates passage of the ACA. “AHPs can be offered across state lines, unlike traditional health insurance.”
SAF has also advocated for HRAs.
“Before the ACA, many small-business owners who could not afford to offer their employees health insurance but wanted to help their employees obtain it would pay for their employees’ medical care or reimburse the employees for health care services through an HRA,” McBurney said. “The ACA made HRAs unlawful on a stand-alone basis.”
When the ACA was enacted, he added, small businesses which did not offer a group health plan with the HRA faced fines of $100 per day, per employee. That totals $36,500 annually per employee up to $500,000 in total, or 18 times more than the $2,000 employer mandate penalty for larger employers who did not provide any coverage.
A law passed by Congress made stand-alone HRAs legal again as of 2017 for employers with fewer than 50 employees.
The new executive order seeks to expand the health insurance options available to employers by making HRAs more available.
New proposed rules implementing these changes must be drafted and processed through the public comment period.
