An employer group says the success of one Trump administration proposal for cutting small employers'health benefits costs depends on the stability of the individual major medical market.

The American Benefits Council has asked the administration tothink about the small employers when it takes steps, such as endingAffordable Care Act cost-sharing reduction subsidy payments in the middle of theyear, that might hurt the individual market.

Trump administration officials announced last Thursday that theywould end the cost-sharing reduction subsidy program payment streamimmediately, because they do not believe the administration has avalid congressional appropriation it can use to justify making thepayments.

Earlier in the day, President Donald Trump asked his cabinetsecretaries to develop proposals for three possible changes to thehealth insurance market. One of the changes suggested involvedemployer-sponsored health reimbursement arrangements, or HRAs.Backers of the HRA proposal want employers to be able to use HRAsto give workers cash the workers can use to buy their ownindividual major medical coverage. Some groups see promotingemployer-paid individual health coverage programs as a way to helpemployers back away from their current role as health coverageproviders.

Hurting individual major medical market, and the Affordable CareAct public health insurance exchange system, “would make individualmarket coverage a less viable option for part-time workers, earlyretirees, and those who would otherwise elect to secure coveragethrough the individual market,” James Klein, president of theAmerican Benefits Council, said in a statement.

Ending cost-sharing reduction subsidy payments could be a stepback for efforts to increase the flexibility of HRA-based programs,Klein said.

Destabilizing the individual health market could also leadhospitals and physicians to shift the cost of caring for newlyuninsured people onto the shoulders of employer-sponsored grouphealth plans, he said.

Definitions

The cost-sharing reduction subsidy program helps low-incomeexchange plan users pay their health plan deductibles and otherout-of-pocket health care costs.

An HRA is an employer-owned account that can help an employeepay for health-care costs, such as bills for deductibles,co-payments and eyeglasses.

One major difference between an HRA and a health savings accountis that an employee can use an HRA together with an ordinarylow-deductible major medical coverage, or major medical coveragewith a very high deductible.

An HSA user must combine the HSA with major medical coveragewith a deductible higher than the statutory minimum threshold, anda deductible at or under a statutory maximum annual out-of-pocketspending limit. For 2017, the minimum individual HSA deductible is$1,300 and the maximum is $6,550.

From: BenefitsPro