Trump Administration Health Reimbursement Arrangements Put

October 2020

Trump Administration Health

Reimbursement Arrangements

Put ACA Subsidies at Risk

for Low-Income Workers

Peter Newell

Director, Health Insurance Project, United Hospital Fund

The Trump administration is running out of time to deliver on

the cornerstone of its health coverage agenda—the repeal of the

Affordable Care Act (ACA) and its replacement with a “beautiful

plan.”

The executive order

issued in September 2020 is a largely

symbolic document rather than a comprehensive replacement plan,

although it also simply restates three bite-sized initiatives that were

ﬁrst set out in a January 2017 executive order

and which haven’t

made much headway in New York. The ﬁrst initiative, loosening

rules on association health plans, was challenged in the courts by a

coalition of state attorneys general led by New York, with a decision

still pending.

A second regulation authorizing “bare-bones” short-

term limited-duration insurance policies that lack ACA consumer

protections was blocked by New York’s insurance regulator.

The

third of these initiatives, individual coverage health reimbursement

arrangements (ICHRAs, pronounced “ick-ruhs”), authorizes employers

to subsidize individual coverage workers buy on their own. It took

effect in January 2020, missing many employers’ open enrollment

windows for the year, though it is an available option for the upcoming

open enrollment season. While the ICHRA proposal may be the best

of a bad lot in terms of the Trump administration’s coverage initiatives,

this brief examines the rule’s signiﬁcant risks for New York consumers,

particularly lower-income enrollees.

UNITED HOSPITAL FUND

ICHRAS PUT ACA SUBSIDIES AT RISK FOR LOWINCOME WORKERS 2

Background

One close observer of the employer-sponsored

insurance market notes the “tortured history”

of health reimbursement arrangements

(HRAs) and traces their origin to 2001,

when employers began oering the plans,

usually in conjunction with high-deductible

health plans, under existing and unclear

Internal Revenue Service guidance in place

at the time.

A year later, the IRS blessed

the arrangements with new guidance (rather

than a statutory change to the IRS Code),

including authorizing the HRAs to be used

by workers to purchase individual coverage

directly from insurers. Employers didn’t make

the provisions widely available, however, and

the Obama administration banned their use

in 2013,

seeking to protect the stability of

the individual market as the ACA was about

to take eect. Congress enacted legislation

tacked on to the 21st Century Cures Act

2016 authorizing qualiﬁed small employer

health reimbursement arrangements,

(QSEHRAs), available to employers with 50

or fewer workers, with the amounts eligible

to be allocated capped at $5,250 annually

($437 per month) and $10,600 annually, for

2020. The latest chapter in HRA development

took place in June 2019, when the IRS, U.S.

Department of Treasury, Centers for Medicare

& Medicaid Services, and U.S. Department

of Labor’s Employee Beneﬁt Security

Administration (together referred to as “the

federal agencies” in the rest of this report),

issued a ﬁnal rule

authorizing ICHRAs and a

related arrangement, excepted beneﬁt health

reimbursement arrangements (EBHRAs),

eective January 1, 2020.

How Do ICHRAs Work?

ICHRAs are similar to other HRAs such

as health savings accounts (HSAs), in that

they allow employers to set aside funds to

reimburse employees for expenses related

to health care. In the case of ICHRAs,

however, no account is actually established;

instead, employer groups allocate funds for

each employee, and then employees submit

claims to employers (or administrators) for

reimbursement, with the reimbursement

amounts not taxed as income for the workers.

In contrast to QSEHRAs, ICHRAs do not

limit the amount that employers may set

aside, and businesses of all sizes are eligible to

participate. Within general IRS guidance on

what constitutes eligible medical expenses,

employers establishing an ICHRA have broad

discretion over the amount of reimbursement;

whether to provide allowances for both

individuals and families; dierent allowances

based on workers’ ages;

what expenses can

be reimbursed, such as individual market

premiums or cost sharing or both; and

whether to roll over unspent amounts from

one year to the next. In order to be eligible

for reimbursement, individuals must enroll in

ACA-compliant individual coverage purchased

on or o the exchange. EBHRAs, however,

can be used for reimbursement of dental

and vision coverage, or short-term limited-

duration insurance (except in New York).

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ICHRAS PUT ACA SUBSIDIES AT RISK FOR LOWINCOME WORKERS 3

Are ICHRAs the Answer to Declining

Employer-Sponsored Coverage

and ACA Gaps?

ICHRAs have some appeal as a way to help

workers access health coverage when it’s not

available on the job. Of 8.7 million New

Yorkers aged 19 to 64 actively participating

in the workforce, more than 634,000 lack

either public or private coverage.

Reﬂecting

higher and higher prices, oer rates by smaller

employers have declined dramatically. For

employers with 50 or fewer workers, oer

rates declined from 54% in 2000, to 34%

in 2019; all told, some 1.6 million workers

in New York are employed at private sector

ﬁrms of this size.

As premiums for employer-

sponsored insurance (ESI) continue to rise,

ICHRAs might be an attractive option for

employers who want to attract and retain

valued employees but can’t aord to pay the

full freight for a comprehensive group plan.

ICHRAs can help employers avoid another

pitfall as well: the tax-advantaged ICHRA

reimbursements don’t count as income

for an employee, unlike well-intentioned

salary increases for workers without group

coverage that might reduce or eliminate

their eligibility for advance premium tax

credits (APTCs) through the marketplace.

ICHRAs can also provide some support for

part-time or gig economy workers ineligible

for ESI. Individuals paying Part A, B, and

D Medicare premiums are also eligible for

ICHRA reimbursement, which could ease the

aordability burden on older New Yorkers as

well. Finally, ICHRA funds from an employer

could oset ACA cost-sharing requirements

for workers with APTCs, or smooth out the

“clis” faced by individuals earning over

400% FPL, who are ineligible for ACA

subsidies.

So What’s Not to Like

About ICHRAs?

Despite the surface appeal of ICHRAs, they

have some drawbacks as well. First, if the

funding level provided by an employer meets

a “minimum aordable ICHRA” test, the

employee becomes ineligible to receive APTCs

for qualiﬁed health plans purchased from the

marketplace.

Second, employers can oer

both ICRHAs and traditional ESI to workers

in 11 dierent classes,

such as hourly vs.

salaried employees, or workers at dierent

locations. These design features have led

to four main concerns in terms of the risks

for New York consumers: higher individual

market premiums due to adverse selection;

the loss of ESI; higher costs for lower-income

consumers by ending their access to APTCs

and the Essential Plan; and new logistical and

administrative burdens on consumers. Details

on each of these concerns follow.

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ICHRAS PUT ACA SUBSIDIES AT RISK FOR LOWINCOME WORKERS 4

Higher Individual Market

Premiums

One of the most frequent criticisms of the

administration’s draft rule was how it was

expected to harm the individual market risk

pool. The American Academy of Actuaries

and other groups warned that adverse

selection could arise in several situations,

leading to an increase in individual market

premiums. For example, since premiums for

larger employers are based on the age, sex,

and overall claims experience of workers,

some employers might shift sicker (or female

or older) workers into ICHRA arrangements

while maintaining ESI for younger, healthier

workers. In addition, older, sicker workers

are more likely to purchase coverage with

ICHRAs than younger, healthier workers,

particularly in the absence of a penalty for not

purchasing coverage, which could also put

upward pressure on premiums. The ﬁnal rule

seeks to address the employer shift problem by

setting minimum numbers of workers within

a class that must participate in order for an

ICHRA to be established,

along with other

safeguards. The federal agencies estimate a

1% increase in individual market premiums,

but one recent analysis

warns of the risk of

higher premium increases, despite the changes.

Loss of ESI

For employers oering comprehensive ESI

now, there are compelling reasons to switch

to an ICHRA, instead of dropping coverage

entirely. They are a way to reduce health

beneﬁt costs but still provide some support

for workers. Promoters of ICHRAs also

describe other beneﬁts for employers, such

as “getting out of the business of managing

your employees’ health risk,” and reducing

costs by replacing a deﬁned beneﬁt plan (ESI)

with a deﬁned contribution plan—the same

argument that has led many employers to

ditch pensions for IRAs. The availability of

ICHRAs could put comprehensive retiree

health plans at risk as well.

Under a

pending federal rule,

providing aordable

ICHRAs would also insulate employers from

penalties under the ACA’s employer shared

responsibility provision, which is still on the

books.

The federal agencies concede that

some workers will lose comprehensive group

coverage; the question is how many. Some

insurance professionals interviewed believe

that dierences between group and individual

coverage—such as narrower networks—

will dissuade employers from switching to

ICHRAs, out of fear of blowback from valued

employees. The federal agencies estimate a

loss of ESI for 7 million workers nationally

in 2029;

if New York State’s share of that

loss is proportional to its overall share of ESI

nationally, about 441,000 New York workers

would lose comprehensive coverage through

their jobs.

The federal agencies acknowledge the

expected ESI decline, though they add an

observation that seems tone deaf in this

COVID-challenged economy: “In the event

that coverage costs for particular employees

substantially increase, those employees are

expected to seek employment at ﬁrms that

continue to oer traditional group health plan

coverage.”

Higher Costs

for Lower-Income Consumers

The biggest risk associated with ICHRA oers

by New York employers is the potential loss of

Essential Plan (EP) coverage for New Yorkers

earning less than 200% of the federal poverty

level, marketplace premium subsidies, and

other beneﬁts under the ACA. Under the ﬁnal

rule, employees can “opt out” of receiving

the ICHRA only if the lowest-cost silver tier

individual plan in the area, less the value of

the ICHRA, exceeds 9.78% of their household

income. Those employees with marketplace

coverage and APTCs whose ICHRA meets this

“minimum aordable ICHRA” standard lose

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ICHRAS PUT ACA SUBSIDIES AT RISK FOR LOWINCOME WORKERS 5

their APTCs. The federal agencies estimate

that take-up of ICHRAs by employers will

lead to a reduction in premium tax credits

of $6.2 billion annually by 2029,

and it’s

easy to see why: the reduction in tax credits

is baked into the design of the minimum

aordable ICHRA rule. It eectively overrides

ACA statutory caps on premiums for enrollees

eligible for APTCs.

ACA premium tax credits are based on

capping the income an eligible individual pays

for premiums, beginning at just over the limit

for Medicaid eligibility at 3.09% of income,

and topping o at 9.78% of income, when

subsidies end. As shown in Table 1, costs for

most families losing APTCs for ICHRAs will

increase because the minimum aordable

ICHRA caps are higher than the ACA caps.

The formula might be more disruptive for

New York, because the EP provides free

or $20 per month coverage for eligible

individuals earning 200% FPL or less. While

these individuals could use their ICHRA for

the purchase of an individual plan without

APTCs, an actuarily equivalent platinum plan

is priced at $900 per month in New York

County, $822 in Albany County, and $721 in

Erie County. The next most vulnerable group

falls into the 200 to 250% FPL category,

where the spread between the premium

cap and minimum aordable ICHRA is

still signiﬁcant; cost-sharing reductions

provided for this group of enrollees would

also be forfeited, leading to higher out-of-

pocket costs. Individuals in the 300 to 400%

category are least at risk. It’s also important to

note that the ICHRA rule replicates the ACA

“family glitch” problem,

so if an individual

is oered an aordable ICHRA, any

dependents on a family policy lose coverage or

APTCs as well.

In order to illustrate how ICHRA oers could

play out in New York, Table 2 shows current

individual premiums and APTCs in three

New York counties at a range of hypothetical

incomes, and estimating how the premiums of

individuals with those incomes would change

with a minimum aordable ICHRA.

In Erie County (Bualo area), a comparatively

lower-cost county, costs would increase for

individuals deemed ineligible for APTCs

Table 1. 2020 ACA Premium/Income Caps vs. Minimum Affordable ICHRA

Income

ACA Premium Cap

($ or % of Income)

NYSOH

Enrollment

Minimum

Affordable ICHRA

< 200% FPL 0$ to $20 790,000 9.78%

200% to 250% FPL 6.49% to 8.29% 68,000 9.78%

250% to 300% FPL 8.29% to 9.78% 45,000 9.78%

300% to 400% FPL 9.78% 48,000 9.78%

> 400% FPL No cap 114,000 9.78%

Sources: Applicable premium caps in columns 1 and 2 from Explaining Health Care Reform: Questions about Health

Insurance Subsidies. January 16, 2020. Henry J. Kaiser Family Foundation. https://www.kff.org/health-reform/issue-

brief/explaining-health-care-reform-questions-about-health/; NYSOH Enrollment in column 3 from NYSOH 2019

Open Enrollment Report. May 2019. https://info.nystateofhealth.ny.gov/2019openenrollmentreport; Minimum

Affordable ICHRA in column 4 based on applicable percentage in ICHRA Final Rule.

TABLE 1. 2020 ACA PREMIUM/INCOME CAPS

VS. MINIMUM AFFORDABLE ICHRA

Sources: Applicable premium caps from Explaining Health Care Reform: Questions about

Health Insurance Subsidies. January 16, 2020. Henry J. Kaiser Family Foundation. https://www.kff.

org/health-reform/issue-brief/explaining-health-care-reform-questions-about-health/; NYSOH

Enrollment in column 3 from NYSOH 2019 Open Enrollment Report. May 2019. https://info.

nystateofhealth.ny.gov/2019openenrollmentreport; Minimum Affordable ICHRA in column 4

based on applicable percentage in ICHRA Final Rule.

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Table 2. ACA Premium Tax Credits vs. ICHRAs at Different Income Levels: Hypothetical

Scenarios in Three New York Counties

2a: Erie County (Lowest-Cost Silver Plan: $489)

Income APTCs Premium

Minimum

ICHRA

New

Premium Change

$24,000 N/A $20

$293 $196 $176

$25,000 $363 $117

$285 $207 $90

$30,000 $300 $180

$244 $245 $65

$31,000 $286 $193

$236 $236 $43

$40,000 $173 $308

$163 $326 $18

$48,000 $107 $373

$98 $391 $18

$50,000 N/A $489

$81 $408 ($81)

$60,000 N/A $489

N/A $489 $0

2b: Tompkins County (Lowest-Cost Silver Plan: $659)

Income APTCs Premium

Minimum

ICHRA

New

Premium

Change

$24,000 N/A $20

$463 $186 $166

$25,000 $538 $121

$455 $204 $83

$30,000 $475 $184

$414 $245 $61

$31,000 $460 $198

$406 $253 $55

$40,000 $347 $312

$333 $326 $14

$48,000 $281 $377

$268 $391 $14

$50,000 N/A $659

$251 $408 ($251)

$60,000 N/A $659

$170 $489 ($170)

2c: Queens County (Lowest-Cost Silver Plan: $619)

Income APTCs Premium

Minimum

ICHRA

New

Premium Change

$24,000 N/A $20

$423 $196 $176

$25,000 $484 $136

$415 $204 $68

$30,000 $420 $199

$374 $245 $46

$31,000 $407 $213

$366 $253 $40

$40,000 $293 $326

$293 $326 $0

$48,000 $277 $392

$228 $391 ($1)

$50,000 N/A $619

$211 $408 ($211)

$60,000 N/A $619

$130 $489 ($130)

TABLE 2. ACA PREMIUM TAX CREDITS VS. ICHRAS AT DIFFERENT

INCOME LEVELS: HYPOTHETICAL SCENARIOS IN THREE NY COUNTIES

Incomes were selected to show impacts of minimum affordable ICHRAs at varying levels of ACA eligibility,

starting with the upper limit of EP eligibility ($24,000) and ﬁnishing with incomes above the level required

for ACA premium tax credits ($50,000 and $60,000); APTCs and premiums are derived from entering

incomes into NYSOH’s Search for Plans tool; minimum ICHRA based on formula annual income/12

subtracted from monthly premium for lowest-cost silver plan in the county = minimum affordable ICHRA;

new premium is the monthly lowest-cost silver plan in a county less the applicable ICHRA allowance; change

is difference between the ACA-subsidized premium and the new ICHRA premium, with negative amounts

representing savings for consumers and positive amounts representing losses.

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because of an aordable ICHRA oer.

Importantly, a $293 monthly ICHRA would

also end Essential Plan eligibility for enrollees

at the higher end of the EP eligibility scale.

About 30,000 Erie County residents were

enrolled in the EP or a qualiﬁed health plan

in 2019,

and the same lowest-cost silver

plan applies in six other neighboring counties.

(The slightly more expensive lowest-cost

silver plan of $485 per month in eect in

Monroe [Rochester area] and ﬁve other

counties suggests that residents there with

marketplace coverage would also be at higher

risk of forfeiting ACA help if employers

oered ICHRAs.) At the same time, for

those ineligible for APTCs in Erie County,

ICHRAs would provide limited value, since an

unsubsidized premium is “aordable” at the

$60,000 income level in low-cost Erie under

the ICHRA rule.

In upstate rural Tompkins County, a

considerably higher-cost region, ICHRAs

would have dierent eects. EP enrollees

would perhaps be less exposed, because a

minimum aordable ICHRA would need

to reach $463, about 45% higher than in

Erie County, to trigger the loss of coverage.

Employers would need to make signiﬁcant

investments in ICHRAs in Tompkins County

to reach the minimum aordable standard,

but workers with incomes above the APTC

cuto would receive signiﬁcant beneﬁts.

In Queens County, with ACA premiums

higher than Erie but lower than Tompkins,

lower-income workers with APTCs would fare

better without ICHRAs. And a higher-priced

minimum aordable ICHRA would probably

expose EP enrollees to a slightly lower risk

of losing coverage but would not eliminate

it. Workers ineligible for APTCs could gain

ICHRA reimbursements that would lower

their premium costs.

Clearly, regional health care costs will greatly

aect the impact of ICHRAs on employees,

but the amount that employers allocate for

ICHRAs will be a critical factor. Annual

costs of employer-sponsored coverage may

be a ceiling, since employers who can aord

ESI would be likely to provide it. One

federal survey

found the 2019 average cost

of individual coverage for private sector

employees in New York to be $650 per

month, and $1,906 per month for families.

There are no federal data on allowance

levels for ICHRAs nationally, but a survey

by one beneﬁt consultant in the ICHRA

market estimated that the average QSEHRA

allocation in 2019 was $3,360 for individuals

($280 per month) and $6,168 for families

($514 per month).

The same company found

a much higher allowance when it surveyed

clients with ICHRAs after the rule was in

eect for 90 days: $5,971 for individuals

($498 per month) and $12,892 for families

($1,074 per month).

It may be that these

allowances reﬂect decisions by employers to

replace ESI with ICHRAs, but allowances

at these levels would create coverage issues

for many New Yorkers eligible for the EP or

APTCs. If employers establish allowances

that exceed the minimum aordable ICHRA

level, it would take some of the sting out of

losing APTCs, but at the same time cause

more individuals to lose ATPCs. A broad

range of compensation for workers at a

place of business also could put employers

in a dicult position: ﬁguring out how to

structure an allocation that helps higher-paid

workers ineligible for ACA assistance but

doesn’t harm lower-paid ones eligible for the

EP or APTCs. One ICHRA consultant advises

under 50-employee businesses to consider

purposefully designing ICHRA plans that

don’t meet the aordability standard.

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Increased Burden

on Consumers

Adoption of ICHRAs by employers will

certainly increase the burden on consumers.

For workers with ESI, accustomed to checking

a box for coverage once a year on a form

explained by the HR department, moving

to an ICHRA begins with determining on

their own if the ICHRA is aordable. If it

is, these workers will have to shop for their

own individual or family plan, during a brief

window when the ICHRA oer is made.

Then the ICHRA covered group will need

to pay for care up front, submit claims to

the employer (or administrator) and wait for

reimbursements. Individuals losing APTCs

for an ICHRA will face similarly complex

transactions, and some employees joining a

ﬁrm after the normal open enrollment period

will need to purchase qualiﬁed health plans

during a special enrollment period. Individuals

who are able to determine that the ICHRA

is not aordable still need to armatively

opt out of the plan or face tax consequences.

Although the ICHRA rule requires employers

to provide notiﬁcation to employees, the

6-page model form is not so easy to decipher.

To its credit, New York State of Health

created a minimum ICHRA aordability tool

on its website.

And while it cautions that it

cannot provide tax advice, NYSOH provided

training to assistors before the rule took eect,

created a special ICHRA unit, and advised its

assistors to counsel consumers to work with

them on ICHRA-related issues before making

coverage decisions.

Conclusion

Based on interviews with health plan ocials,

insurance producers, business leaders, and

regulators, ICHRAs have yet to make a

real splash in New York. One plan ocial

described ICHRAs as a “niche market” that

employers might use for seasonal or part-time

workers. One broker believed that start-ups

might ﬁnd ICHRAs useful in a transition

period, providing some beneﬁts for workers

until the company grows enough to provide

ESI. Another wild card is the impact of the

COVID-19 pandemic on employer’s beneﬁt

decisions, at a time when many individuals

have lost their ESI, businesses are still

hurting from the eects of the shutdown, and

Congress is still deadlocked on another round

of stimulus funding. One business leader

noted that employers may be reluctant to try

out a new beneﬁt arrangement now, given the

challenges of the past year.

But as a new open enrollment period is about

to begin for employers, interest in ICHRAs

could increase. Employers may seek to

establish ICHRAs to get out from under the

employer shared-responsibility payments.

Certainly, the federal agencies (and vendors)

continue to beat the drum about ICHRAs,

pushing out written materials regularly

and

holding monthly promotional webinars;

they estimate that about 11.4 million workers

will be enrolled in individual coverage with

ICHRAs by 2029,

about the same number

of Americans as are currently enrolled in

Marketplace coverage. On the other hand,

despite a growing number of entrepreneurs

marketing their services, ICHRAs may

just collapse under their own weight; for a

simple concept—helping employers subsidize

individual coverage—the ICHRA rule and

process is complex. It touches on complicated

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ERISA issues, COBRA, IRS Section 125

cafeteria plans, Medicare and the Medicare

Secondary Payer rules, the ACA employer

mandate and other parts of the ACA, and

health savings accounts. As an example of

just how overstretched health care tax policy

has become, a single employee could have an

ICHRA, an HSA, an EBHRA, and a section

125 cafeteria plan with pre-tax deductions for

health premiums, all at the same time.

Voters will certainly have a say in November

on what role ICHRAs, adopted solely through

rule, will play in the health care system,

and the U.S. Supreme Court is scheduled to

hear oral arguments on a lawsuit seeking to

invalidate the entire ACA on November 10,

2020. Most court watchers agree that the

sad passing of Justice Ruth Bader Ginsburg,

coupled with the expected conﬁrmation

of nominee Amy Coney Barrett, puts the

ACA in greater jeopardy. Judge Barrett has

written that “Chief Justice Roberts pushed

the Aordable Care Act beyond its plausible

meaning to save the statute.”

Whatever the outcomes on these broader

legal and political stages, ICHRAs could

be vastly improved for New Yorkers with

three changes—made through the regulatory

authority of the federal agencies, or, if

necessary, through a statutory change enacted

by Congress:

• First, grant Essential Plan enrollees an

automatic right to opt out of ICHRAs

without an aordability test.

• Second, allow individuals to receive both

ICHRAs and APTCs if they are eligible

for both. After all, other tax-preferred

health provisions are not restricted

based on income, and large amounts of

federal and state revenue ﬂow to upper-

income owners of HSAs, HRAs and,

most famously, through the tax exclusion

of employer contributions to health

insurance.

• And third, to discourage the wholesale

replacement of ESI with ICHRAs,

limit the option to small employers

(like QSEHRAs)—or condition large

employers’ exemption from the employer

responsibility provisions on providing

as much as a typical employer would

contribute to a comprehensive group

plan, rather than the current minimum

aordable ICHRA standard.

These three simple changes would establish

ICHRAs as a tool that helps address

shortcomings in the ESI market and the

ACA—rather than undermining them.

Acknowledgments

This work was supported by a grant from The

New York Community Trust. State ocials,

insurance brokers, health plan representatives

and business leaders interviewed were

generous with their time and insights. UHF

Managing Editor Miles P. Finley edited and

designed this report, and Director of Public

Information Catherine Arnst and Digital

Marketing Director Francesca Demane

handled a number of tasks related to media

and dissemination.

UNITED HOSPITAL FUND

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Endnotes

1 Knight V. August 13, 2020. Back to the Future: Trump’s History of Promising a Health Plan

that Never Comes. Kaiser Health News. https://khn.org/news/back-to-the-future-trumps-

history-of-promising-a-health-plan-that-never-comes/

2 The White House. Executive Order on an America-First Healthcare Plan. September 24, 2020.

https://www.whitehouse.gov/presidential-actions/executive-order-america-ﬁrst-healthcare-

plan/

3 Presidential Executive Order Promoting Healthcare Choice and Competition Across the

United States. Executive Order 13813. President Donald J. Trump. https://www.whitehouse.

gov/presidential-actions/presidential-executive-order-promoting-healthcare-choice-

competition-across-united-states/

4 Keith K. November 15, 2019. Oral Arguments Held Over AHP Rule. Health Affairs Blog. https://

www.healthaffairs.org/do/10.1377/hblog20191115.817726/full/

5 New York State Department of Financial Services. June 21, 2018. Insurance Circular Letter No.

7 (2018). Prohibition on Short-Term Limited Duration Plans. https://www.dfs.ny.gov/insurance/

circltr/2018/cl2018_07.htm

6 Fronstein P. December 4, 2018. The Tortuous History of HRAs: What Does the Future Hold?

Employee Beneﬁts Research Institute. https://ebriorg.wordpress.com/2018/12/04/the-

tortuous-history-of-hras-what-does-the-future-hold/

7 U.S. Department of Labor. Employee Beneﬁt Security Administration. Technical Release No.

2013-13. https://www.dol.gov/agencies/ebsa/employers-and-advisers/guidance/technical-

releases/13-03

8 21st Century Cures Act. P.L. 114-255. Stat.1033, Section 18001. https://www.govinfo.gov/content/

pkg/PLAW-114publ255/pdf/PLAW-114publ255.pdf

9 Department of the Treasury, Internal Revenue Service; Employee Beneﬁts Security

Administration, Department of Labor; Centers for Medicare & Medicaid Services, Department

of Health and Human Services. June 20, 2019. Health Reimbursement Arrangements

and Other Account-Based Group Health Plans. FR 288888. https://www.federalregister.

gov/d/2019-12571

10 U.S. Treasury Department, Internal Revenue Service. Publication 502. https://www.irs.gov/

pub/irs-pdf/p502.pdf

11 New York does not permit premium variations based on age, unlike nearly all other states, so

this component has less relevance for New York-based ICHRAs.

12 Four other states prohibit “underwritten” STLDI, and a handful of others place other

restrictions on the plans. For background information, see Giovanelli J, JA Volk and K

Lucia. January 15, 2020. States Work to Make Individual Coverage More Affordable, but

Long-Term Solutions Call for Federal Leadership. The Commonwealth Fund. https://www.

commonwealthfund.org/publications/issue-briefs/2020/jan/states-make-indivldual-coverage-

more-affordable-federal-needed

13 UHF analysis of American Community Survey, U.S. Bureau of the Census. One-year 2019

estimate.

14 Agency for Healthcare Research and Quality, Center for Financing, Access and Cost Trends.

Medical Expenditure Panel Survey-Insurance Component. https://meps.ahrq.gov/data_stats/

quick_tables_search.jsp?component=2&subcomponent=2

UNITED HOSPITAL FUND

ICHRAS PUT ACA SUBSIDIES AT RISK FOR LOWINCOME WORKERS 11

15 Final Rule, p.29026

16 Final Rule, p.29005

17 Comments by the American Academy of Actuaries on Health Reimbursement

Arrangements and Other Account-Based Group Health Plans. December 13, 2018 https://

www.actuary.org/sites/default/ﬁles/ﬁles/publications/HRA_comments_12_13_2018.pdf

18 Final Rule, p.29019

19 Young CL, J Levitis and M Fiedler. December 2018. Evaluating the Administration’s Health

Reimbursement Arrangement Proposal. Brookings. https://www.brookings.edu/research/

evaluating-the-administrations-health-reimbursement-arrangement-proposal/; Young

CL, M Fiedler, J Levitis. June 14, 2019. The Trump Administration’s ﬁnal HRA rule: Similar to

the proposed but some notable choices. Brookings. https://www.brookings.edu/blog/usc-

brookings-schaeffer-on-health-policy/2019/06/14/the-trump-administrations-ﬁnal-hra-rule-

similar-to-the-proposed-but-some-notable-choices/

20 Personal communication with a New York retiree whose former employer is replacing

comprehensive Medicare supplement and drug coverage with an ICHRA.

21 U.S. Department of the Treasury, Internal Revenue Service. Application of the Employer

Shared Responsibility Provisions and Certain Nondiscrimination Rules to Health

Reimbursement Arrangements and Other Account-Based Group Health Plans Integrated

with Individual Health Insurance Coverage or Medicare. RIN 1545-BP17. Federal Register, Vol.

84, September 30, 2019. https://www.govinfo.gov/content/pkg/FR-2019-09-30/pdf/2019-20034.

pdf

22 U.S. Department of the Treasury, Internal Revenue Service. Employer Shared Responsibility

Provisions. https://www.irs.gov/affordable-care-act/employers/employer-shared-responsibility-

provisions

23 Final Rules. Table 2, p.28965

24 New York accounts for about 6.3 % of total U.S. ESI coverage nationally; 6.3% of estimated 7

million loss in ESI is about 441,000.

25 Final Rule, p.28967

26 Final Rule, Table 2, p.28965

27 Brooks T. November 10, 2014. The Family Glitch. Health Affairs. Health Issue Brief. https://www.

healthaffairs.org/do/10.1377/hpb20141110.62257/full/

28 NY State of Health. 2019 Enrollment by County. https://info.nystateofhealth.

ny.gov/2019countylevelenrollmentdata

29 Agency for Healthcare Research and Quality, Center for Financing, Access and Cost Trends.

Medical Expenditure Panel Survey-Insurance Component. https://meps.ahrq.gov/data_stats/

quick_tables_search.jsp?component=2&subcomponent=2

30 Peoplekeep. February 12, 2020. Peoplekeep 2020 QSEHRA Annual Report. https://www.

peoplekeep.com/blog/2020-qsehra-annual-report

31 Flitton A. April 15, 2020. What We Learned in the First 90 days of the Individual Coverage

Health Reimbursement Arrangement. Peoplekeep. https://www.peoplekeep.com/blog/

individual-coverage-hra-90-day-report?hs_preview=PjbbJZLS-28358533095

32 Takecommandhealth ICHRA – A Comprehensive Guide. https://www.takecommandhealth.

com/ichra-guide

33 U.S. Department of Labor. Individual Coverage HRA Model Notice. https://www.dol.gov/sites/

dolgov/ﬁles/ebsa/laws-and-regulations/rules-and-regulations/completed-rulemaking/1210-

AB87/individual-coverage-model-notice.pdf

UNITED HOSPITAL FUND

ICHRAS PUT ACA SUBSIDIES AT RISK FOR LOWINCOME WORKERS 12

34 NY State of Health. Individual Health Coverage Arrangements. https://info.nystateofhealth.

ny.gov/hra

35 NY State of Health. Training Update. November 20, 2019. https://info.nystateofhealth.ny.gov/

sites/default/ﬁles/Individual%20Coverage%20HRA%20Training%20Memo%20for%20Assistors.

pdf

36 See, for example, HealthCare.gov. Health Reimbursement Arrangements for Small

Employers. https://www.healthcare.gov/small-businesses/learn-more/qsehra/; Internal

Revenue Service. Health Reimbursement Arrangements. https://www.irs.gov/newsroom/

health-reimbursement-arrangements-hras; Healthcare.gov. https://www.healthcare.gov/

small-businesses/learn-more/individual-coverage-hra/; CMS, Consumer Information and

Insurance Oversight. https://www.cms.gov/CCIIO/Programs-and-Initiatives/Health-Insurance-

Market-Reforms/Health-Reimbursement-Arrangements

37 CMS. Health Reimbursement Arrangements Webinars. https://bit.ly/CMS-HRA-Webinars;

password: XtXuwSN9

38 Final Rule, Table 2, p.28965

39 Barrett AC. Countering the Majoritarian Difﬁculty. January 2017. 32 Const. Comment. 61 (2017).

https://scholarship.law.nd.edu/law_faculty_scholarship/1318/

40 Newell P. September 26, 2019. Easing the Stigma of Public Coverage: Workers with Health

Coverage at Their Jobs Get Signiﬁcant Government Aid Too. United Hospital Fund. https://

uhfnyc.org/publications/publication/easing-stigma-of-public-coverage/