Federal Contractor Report

Trump Administration Proposes Changes to Health Reimbursement Arrangements

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On October 23, The U.S. Departments of the Treasury, Health and Human Services, and Labor issued a proposed regulation that would expand the usability of health reimbursement arrangements (HRAs). This proposed regulation is in response to President Trump’s Executive Order on “Promoting Healthcare Choice and Competition Across the United States.” Specifically, the proposal would expand the use of employees’ personal health reimbursement accounts to buy individual health plans and providing them the same tax advantage as an employee choosing traditional employer sponsored coverage.

Health reimbursement accounts, which are typically offered by large employers, are used to reimburse employees for medical expenses up to a specified dollar limit. Expanding the arrangements to cover individual insurance premiums could allow employers to give workers more options and make it easier for smaller employers to offer some type of benefit. Employers fully fund HRAs, in contrast with health flexible spending accounts, which are funded as pre-tax contributions from workers’ salaries.

For more information, contact Claiborne Guy at claiborne.guy@agc.org or 703-837-5382.


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