New Bill Would Expand Pool of Individual Health Coverage Shoppers

PeopleKeep, a company that helps employers set up cash-for-coverage programs, says in a QSEHRA report based on its own customers that the average monthly allowance at a QSEHRA increased to $412 in 2022, from $297 in 2019, and that it’s had the best success with selling QSEHRA services in California, Colorado, Florida, Ohio and Texas.

One sign of agent and broker interest in the cash-for-coverage market: The National Association of Benefits and Insurance Professionals — the group formerly known as the National Association of Health Underwriters — presented a podcast featuring HRA Council representatives in December.

The CHOICE Arrangement Act Bill

Rep. Kevin Hern, R-Okla., introduced H.R. 3977.

H.R. 3977 has just one co-sponsor, Rep. Nicole Malliotakis, R-Ky., but the House Ways and Means Committee approved the bill by a 25-18 vote Monday.

The bill has strong support from the National Federation of Independent Business and from business groups outside of the insurance industry, such as the U.S. Chamber of Commerce and the Associated General Contractors of America.

Brad O’Neill, the president of the ICHRA Shop, an ICHRA program distributor, has been one of the health account supporters working to promote H.R. 3977 on Capitol Hill. He has encouraged his 4,500 LinkedIn followers to call their elected officials to support the bill.

Bill backers contend that the bill could increase employer use of cash-for-coverage arrangements, by putting the arrangements in federal law and reducing the odds that new presidential administrations could shut down or drastically change the program rules.

One question is whether a CHOICE arrangement would be identical to an ICHRA program or somewhat different.

Like the ICHRA program, a CHOICE arrangement would let employers of any size, and their workers, exclude payments for individual coverage from taxable income.

H.R. 3977 would prohibit employers from running a CHOICE arrangement in a discriminatory way, and it would require employers and workers to verify that workers had used their CHOICE cash to pay for health coverage.

H.R. 3977 includes one section that refers specifically to ICHRAs: “Any reference to custom health option and individual care expense arrangements shall for purposes of such rules be treated as including a reference to individual coverage health reimbursement arrangements.”

The Future

Republicans have a majority in the House. Many bills passed by the House wither once they reach the Senate, where the Democrats have a majority.

Republicans have been warmer toward health account bills than Democrats have, but, when the QSEHRA measure was a stand-alone bill, H.R. 3060, it attracted seven Democratic co-sponsors, along with 11 Republican co-sponsors.

The QSEHRA measure then became federal law by riding to passage inside a popular, bipartisan health care bill, inside a must-pass spending package.

Although President Joe Biden averted a government shutdown by signing a federal debt limit bill earlier this month, other must-pass spending bills are still moving through Congress and could ferry bills like H.R. 3977 through the Senate.

Rep. Kevin Hern, R-Okla. Credit: Hern