ObamaCare Ruling Just Killed Portable Health Insurance

Although it is rarely discussed by the national health media, a quiet revolution in how health insurance is purchased has been health-insurance-portability_325_102211015824underway for several years now. Specifically, employers have been using Health Reimbursement Arrangements (HRAs) to allow their employees to purchase individually owned health insurance. A number of states, including Colorado, have expressly passed legislation sanctioning this procedure. Absent the HRA, most states have made it illegal for employers to help their employees obtain individual insurance with pre-tax dollars. With certain exceptions (Taft Hartley unions, pro football players, etc.), the only kind of insurance that is portable is individually owned insurance.

Now Louise Norris tells us that an IRS ruling last week concludes that this practice must be discontinued, apparently because of the Affordable Care Act.

See my Health Affairs piece on portable insurance under USD tax and regulatory law for some background.

Comments (11)

Trackback URL | Comments RSS Feed

  1. JD says:

    We need more choice, not less, ObamaCare is going to harm a lot of people.

  2. Rutledge says:

    This is going to really hurt the employees of small firms (<50 employees) since the company doesn't have to provide health insurance, yet is not allow to help with the cost via HRA.

  3. Perry says:

    Bad, bad, bad.

  4. PJ says:

    For a law that is repeatedly touted by its proponents as helping so many people, it sure knows how to kill choice and reduce health care options, and we continue to see more and more consequences on a daily basis. I just hope people make the connection and see why we’re going in the wrong direction and how to fix it.

    • JD says:

      The intellectual left has publicly recognized this, but they are arguing that LESS CHOICE IS ACTUALLY GOOD! Can you believe that?

  5. Bill Huber says:

    I am confused how Louise Norris’s article kills portable health care. Her comments about the IRS rulings concerning HRAs compliance with the Affordable Care Act are correct for firms with 50 or more employees but that is not news. When I read IRS Notice 2013-54 it reiterates previous rulings but does not provide any additional restrictions for firms with less 50 employees. Although I should defer to Zane Benefits since they have written extensively about the Affordable Care Act and HRAs, I will go out on a limb and say that portable health care is probably alive and well for firms with less than 50 employees.

    If HRAs are shown to work for businesses with less than 50 employees during the chaos of the Affordable Care Act crisis, maybe our legislators will consider moving the employee limit higher when they start talking about reforming the health care reform. Even a blind squirrel finds a nut once in a while.