House Republicans passed legislation Wednesday meant to make it it easier for small businesses to cover healthcare costs for their employees.
The Custom Health Option and Individual Care Expenses Arrangement Act, or CHOICE Arrangement Act, codifies the health reimbursement arrangements established by the Trump administration in 2019, allowing business owners to reimburse their employees for individual health insurance plans as well as provide tax-advantaged funds for qualified medical expenses. It is meant to provide an alternative to employer-provided health plans, which are tax-privileged under current law.
“Washington should not stand in the way of workers getting the health care coverage that’s best for them and their families. Just as important, workers should be able to take their insurance plan with them if they leave their current job,” said Chairman of the House Ways and Means Committee Jason Smith (R-MO).
“This bill gives small businesses the opportunity, if they so choose, to shed the administrative burden of managing traditional insurance coverage. At the same time, it gives workers more options for their own health care and makes that coverage portable,” said Smith.
Democrats, though, said the measure, which passed along party lines, would undermine Obamacare by reviving Trump-era rules. “This is all Trump, Trump, Trump,” said Rep. Lloyd Doggett (D-TX), calling it “death by a thousand cuts” to Obamacare.
Included in the bill is also a provision drafted by Rep. Claudia Tenney (R-NY) that requires the Treasury Department to clearly inform businesses of different tax advantages and programs that make providing healthcare benefits to their employees financially feasible.
“Small employers want to provide these benefits to their employees to not only retain them but to ensure they have a high quality of life,” said Tenney, who owns a small printing business in upstate New York. “It is time that we increase awareness of these programs and address any obstacles to their successful and effective implementation.”
H.R. 3799 is part of a larger healthcare package that protects self-insurance, stop-loss insurance, and association health plans.
Rep. Robert Scott (D-VA) condemned the bill on the House floor as a “recycled futile attempt to circumvent the Affordable Care Act.”
Both Scott and Doggett expressed concerns that H.R. 3799 would allow employers to discriminate against employees with pre-existing conditions and that consumers needed to be protected from being forced into “junk” plans by employers.
Chairwoman of the House Committee on Education and the Workforce, Dr. Virginia Foxx, said that “this bill does not turn health care into the Wild West like some members claim.”
“True, everyone had health insurance [under Obamacare],” said Rep. Tim Walberg (R-MI), who authored the health association plans protections portion of the legislation, “but not everyone had healthcare.” Walberg proceeded to cite the rising costs of health insurance premiums as well as healthcare products and services.
Small businesses have consistently reported for 40 years that the cost of providing health insurance to their employees is their number one concern, according to the National Federation of Independent Businesses.
Only 39% of businesses with between one and nine employees offer health insurance, compared to 89% of firms with 30 or more employees according to the NFIB. Of those small businesses, 94% report that it is difficult to some degree to offer employer-sponsored health insurance as a part of their benefits package.