Federal Rule Creating New Health Coverage Option for Employers Could Destabilize the Individual Market

A federal rule granting a new health coverage option for employers could destabilize health insurance marketplaces if enrollees with higher health costs enroll there

The rule’s impact will depend whether employers use health reimbursement arrangements to shift high-cost employees into the individual market, among other factors

The Trump administration has finalized a rule that would allow employers to fund individual, tax-preferred accounts for employees to buy coverage on their own rather than cover them under employer-sponsored group plans. This change could shift individuals from employer-based coverage, which insures more than half of all Americans under age 65, to the state-regulated individual markets, including the Affordable Care Act (ACA) marketplaces. Health care costs for these individuals...