In October, the Trump administration proposed a new rule that would expand the ways employers can use health reimbursement arrangements (HRAs) to provide their employees with high-quality, low-cost health coverage. The United States Department of the Treasury estimates that once the new rules go into effect, 800,000 employers will take advantage of HRAs, which could affect coverage for more than 10 million employees.
HRAs are employer-funded accounts used to augment group health plans. Contributions made to HRA accounts are not taxed. Under Obama-era rules, HRAs can be used by employees to pay for qualifying health expenses, as determined by federal regulations and employers, in conjunction with a group health insurance plan.
HRAs can, for example, be used by people to cover out-of-pocket costs for a medical procedure. Funds that remain in an HRA account at the end of each year can be rolled over to the following year, encouraging health care savings.
Although HRAs currently offer some employees and their family members important benefits, they have been limited dramatically by federal agencies — a problem the Trump administration is now working to solve.
The administration could improve its proposed rule by clarifying that patients who pay for direct primary care (DPC) agreements would be eligible for reimbursement through their employer’s HRA. By classifying DPCs as a qualifying health-care expense, employees could use their HRAs to pay DPC costs, making it easier than ever for them to have access to more affordable primary care services.
DPCs are fixed-fee agreements made directly between primary care doctors and patients. Direct primary care agreements offer patients access to a defined set of health care services, including chronic disease treatment, check-ups and various health tests, at a flat, fixed monthly rate. At Epiphany Health, the direct primary care practice I founded in North Port, Fla., we charge only $65 per month for an adult membership and $25 for one child. A four-person family pays just $155 per month to receive primary care services, as well as have access to other typically more expensive care, like MRIs or blood tests, at a steeply discounted rate.
As the Docs 4 Patient Care Foundation, an organization I serve as president, noted in our substantive, eight-page comment invited by the administration, allowing the millions of people expected to access HRAs in the coming years to use these funds to pay for DPC agreements would be one of the most important improvements the Trump administration could make to the proposed rule. This would not only save money for millions of people, it would also reduce health care costs across the board and encourage those with HRAs to access routine care, save money and build up the funds in their HRA accounts.