Twelve State-based Marketplace Leaders Express Serious Concerns about Federal Health Reimbursement Arrangement Rule Changes

In an April 29, 2019 letter to the secretaries of the departments of Treasury, Labor, and Health and Human Services, 12 state-based marketplace leaders expressed serious concerns about delays in proposed federal rules that would significantly change states’ insurance markets and marketplaces in 2020.

The proposed rules would impact health reimbursement arrangements (HRAs) — allowing employers to deposit pre-tax funds into accounts for employees to use to purchase insurance coverage. Previously, HRAs could only be tapped to purchase certain medical services and equipment. The government originally proposed the rule changes last October, but it has not released a final version of these rules yet, despite the fact the proposed changes are proposed to go into effect in 2020.

As proposed, implementation of the rule would require marketplaces to make significant policy and operational changes. With 2020 rate-filing deadlines starting next month and open enrollment beginning in six months, there is little time for marketplaces to implement changes.

In their letter, marketplace leaders emphasize that last-minute changes imposed by the final rule will lead to significant costs and a hasty implementation that would “detract from attention and service to marketplace enrollees and locally determined priorities for marketplace functionality.” They also point out that little time remains to adjust insurance product offerings to account for the hundreds of thousands of individuals expected to switch from the group health market into individual market coverage.