HHS Secretary Alex Azar. Photo: Jessica McGowan/Getty Images
Employers will soon be allowed to use pre-tax dollars to subsidize their employees' individual market coverage, the Trump administration announced Thursday.
What it means: This policy is probably good for employers and bad for taxpayers, according to a Brookings analysis of an earlier draft of the proposal.
- The policy doesn't ban employers from offloading their sickest workers, though it tries to limit that practice.
- If businesses do shift the workers with the highest medical bills away from the company-sponsored health plan, that plan's premiums would go down. But the influx of sicker patients into the individual market would drive those premiums up.
The other side: The administration, on the other hand, argues that the rule will enhance competition in the individual market.
The bottom line: The rule also allows employers to contribute to their employees' purchase of short-term plans. These plans appeal to younger, healthier people, which means that older, sicker workers could end up paying higher premiums, according to Brookings.