House Passes Revamped Employer Cash-for-Coverage Bill

HRAs are different from another, better-known type of health account, the health savings account, but employers can use HRAs in cash-for-coverage arrangements and cannot use HSAs that way.

One of the provisions added to H.R. 3799 in the House Rules Committee would help employers use association health plans — or groups of employers — to provide health coverage.

Another provision added to the bill would block state insurance regulators from interfering with small employers’ use of stop-loss insurance, or insurance for health plans, to set up self-insured health plans.

The Backdrop

States can regulate individual health policies purchased by workers using employer cash, but skeptics fear that employer cash-for-coverage arrangements could destabilize either the individual market or the small group market, by pushing older, sicker workers one way or the other.

Traditionally, many Democrats, health insurers and state insurance regulators have seen the use of association health plans and stop-loss insurance as mechanisms for helping employers avoid complying with state health insurance regulations.

All House Republicans who voted on H.R. 3799 Wednesday backed the bill, but all Democrats who voted opposed it.

The party-line vote suggests that the expanded version of the bill could have a hard time winning support from Democrats in the Senate.

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