ObamaCare Ruling Just Killed Portable Health Insurance

Although it is rarely discussed by the national health media, a quiet revolution in how health insurance is purchased has been underway for several years now. Specifically, employers have been using Health Reimbursement Arrangements (HRAs) to allow their employees to purchase individually owned health insurance.

A number of states, including Colorado, have expressly passed legislation sanctioning this procedure. Absent the HRA, most states have made it illegal for employers to help their employees obtain individual insurance with pre-tax dollars. With certain exceptions (Taft Hartley unions, pro football players, etc.), the only kind of insurance that is portable is individually owned insurance.

Now Louise Norris tells us that an IRS ruling last month concludes that this practice must be discontinued, apparently because of the Affordable Care Act.

See my Health Affairs piece on portable insurance under USD tax and regulatory law for some background. For more information, see my book Priceless: Curing the Healthcare Crisis.

[Cross-posted at Psychology Today and John Goodman’s Health Policy Blog]