Trump administration expands pre-tax accounts for health insurance coverage

The Health and Human Services, Labor and Treasury Departments joined forces on a new initiative intended to provide affordable health care coverage to hundreds of thousands of Americans, Secretary of Labor Alex Acosta said.

The legislation will expand the use health reimbursement arrangements (HRAs), allowing employees use pre-tax health arrangements to buy insurance.

“What employers can do is simply put money in an account for their employees and then allow their employees -- this is pre-tax dollars -- to take these funds and purchase insurance. It is more choice,” Acosta said during an exclusive interview on “Mornings with Maria” on Friday.

The Trump administration said the rule is expected to expand coverage by 2029 to an estimated 800,000 small businesses that were previously uninsured and more than 11 million employees and family members.

“The employees can choose whatever insurance they believe is appropriate and as importantly, more portability because when an employee goes from one business to another, they can keep their insurance because, in essence, they are paying for it themselves through employer money,” Acosta said.

Acosta said fewer small businesses have offered employees health care and health insurance since ObamaCare was implemented.

“We’ve gone from about half of businesses with 25 or fewer employees to now only about a third offering their employees health care,” Acosta said.


The HRA regulation is the latest addition to President Trump’s health care executive order in 2017, which the administration has framed as an effort to deliver more health coverage choices and lower health care costs for Americans and small businesses.

“This allows those small businesses, those that have 10 employees, 15 employees, to tell their employees, look: 'We’re are going to put pre-tax dollars in an account meant for you,'” Acosta said. “You control the dollars, you control the account and you go out there and you buy the insurance that’s right."