Trump Administration Unveils Health Options for Small Firms

The Trump administration is rolling out new options for small employers to use tax-free accounts for providing health coverage to workers, officials said Monday.

The idea is to expand so-called "health reimbursement arrangements" to allow employees to buy their own individual health insurance policies.

Employers could also pair the accounts with workplace health plans, allowing workers to use the money for additional benefits such as dental care.

Officials from the departments of Treasury, Labor, and Health and Human Services provided a broad overview of the proposed regulations Monday evening ahead of an official announcement, expected Tuesday.

Critics say the approach will undermine traditional job-based coverage.

HRAs join other Trump administration health insurance initiatives, including association health plans and short-term policies.

The latest changes appear to be complex and it could take time for employers to them sort out.

Officials said the proposal is aimed at two types of companies: small firms that are not required to offer health insurance and medium-sized firms that usually only offer their workers a single plan.

The biggest change involves expanding the use of tax-free HRAs to allow more workers to buy their own health insurance, a practice the Obama administration had discouraged. The money employers put in the accounts is tax-free to workers and tax-deductible for the company. Officials say the move will bring more consumers into the individual health insurance market and promote competition.

But critics say HRAs could allow employers to devise strategies for shifting workers with high health care costs off their corporate plans and into the market for individual policies. The administration says its plan includes protections for workers.

Administration officials said they hope the plan will lead to more people getting health insurance, particularly in small companies that tend not to offer coverage.