A woman fills out paperwork while waiting in a doctor's office. Photo: Jason Connolly / AFP via Getty Images

The Trump administration was set on three primary health insurance ideas when it released its health care executive order last October.

Association health plans: Check. Short-term health plans: Check.

What's next: Health reimbursement arrangements, which allow workers to buy coverage with tax-free dollars.

Background on HRAs:

  • Companies create HRAs as a way to give their employees tax-free money to buy health insurance, instead offering traditional plans themselves.
  • The IRS previously said HRAs did not comply with Affordable Care Act coverage requirements, but the 21st Century Cures Act made it acceptable for small companies to fund HRAs so employees can buy health insurance on or off the ACA marketplaces.

Here's what the Department of Health and Human Services could do:

  • Relax rules so companies of all sizes can take advantage of HRAs. Medium-sized and large employers want the same option of setting up HRAs for workers to buy ACA coverage, said Chris Condeluci, who worked on the ACA as a Senate GOP staff attorney.
  • Now that the individual mandate has been repealed, the administration could open the door for companies "to provide funds to buy noncompliant coverage," said Gary Claxton, a vice president at the Kaiser Family Foundation.

The Trump administration has blown past the 120-day deadline it gave itself to propose new HRA regulations or revise past guidance. HHS did not respond to questions about when something might come.

Looking further ahead: Could this trigger employers to stop offering their traditional coverage and push workers toward the ACA marketplaces or elsewhere? It's possible, especially for companies that have sick employees or are in high-risk industries like logging or construction. The dumping could work the other way as well, Condeluci said, if startups with young workers want fewer benefits headaches.

Big companies may not rush to adopt any potential new HRA options if they don't want to risk an employee revolt. Job-based health plans generally have lower deductibles and more generous coverage than typical ACA plans. "The main reason why employers offer benefits through work is to attract and retain talent," Condeluci said.

The bottom line: This all sounds esoteric, and it is, but expanding HRAs could reshape how people get health insurance from their jobs.

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