New rules issued by the US Department of Labor, US Department of Health and Human Services, and US Department of the Treasury in 2019 (collectively, the Departments) may fundamentally transform the way many employers assist employees with their health care costs.
This significant development will again allow employers to:
- reimburse employees for some or all of the premium expenses they pay for an individual health insurance policy, and
- use their funds to directly pay the premiums for individual health insurance policy covering an employee.
Employers commonly used these methods to provide health insurance for employees for over half a century, but they had been made unlawful by the Affordable Care Act (ACA or Obamacare).
The Affordable Care Act contains several reforms of the insurance market (market reforms) that apply to group health plans, including the following:
- Annual dollar limit prohibition. A group health plan may not establish any annual limit on the dollar amount of benefits for any individual.