The New Role of HRAs After Trump’s ACA Executive Orders

From Employee Benefit Advisor

Shandon Fowler, principal and owner of a benefits and healthcare strategy and communication consultancy, wrote in EBA that “President Trump wants to allow for HRAs to be used for non-group coverage to employers of all sizes, not just small employers. “


“If regulatory language makes the same approach for small businesses available to businesses of any size, broker and consultants should view this as an industry-redefining disruption.”

Fowler sees this as a real game-changer writing, “Never before has there been a vehicle for large employers to send employees to the individual market and maintain the tax advantage of paying for employee health coverage. And never before have employees stood to potentially pay less on the open market than for employer coverage, thanks to ACA subsidies.”

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The Coming Revolution in Consumer-Driven Care

There is a new industry of “CDHC account administration firms” to manage these accounts and provide support services. [CDHC=Consumer Driven Health Care.]

These firms offer integrated platforms for the three accounts and support consumers with website management, debit and credit cards, and increasing cost and quality information. …these CDHC firms are taking over private insurance.

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Random Notes From the Health Care Sessions at the Visa Prepaid Forum

I mentioned earlier this week that I would be in Scottsdale attending the annual Visa Prepaid Forum. This is the event hosted yearly by the people at Visa who work to bring us those stored value cards like the gift cards that look and operate pretty much like a bank debit card. The Forum has attracted over 300 participants from banks, merchants, card processors, and others involved in making pre-paid cards work.

On Day One of the forum, I attended breakout sessions especially geared to the use of health care cards attached to HSAs, HRAs and FSAs.

Here are some random notes from Day One of the Visa prepaid Forum:

  1. There is still plenty of opportunity to convert paper-based medical payment systems to electronic, card-based methods of payment. In 2007, only about 11% of medical payments were made via debit card vs. 49% still being made by checks.
  2. Of the payments made via debit card, more than 80% were at the point of service vs. post visit payments to pay for remaining balances.
  3. IIAS is now up and running in more than 25,000 locations.
  4. By 4Q09, after drug stores and pharmacies go on the system in July, it is predicted that nearly 80% of FSA/HRA card transactions will auto-substantiate via IIAS.
  5. Almost 100% of current IIAS-qualified transactions are going through the system correctly.
  6. Over 600 of the largest merchants can now handle partial authorization on health care cards allowing transactions to be split between the health card and another form of payment.
  7. Health care spending placed on HSA debit cards increased by 69% in CY08.
  8. Unaided awareness of HSAs is approaching 50%
  9. A Visa debit card remains the most popular way to access HSA funds, according to research.
  10. Acceptance and safety are strong motivators for using the Visa card to access HSA funds.