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ABC Supports DOL Proposals on ARPs and HRAs

January 9, 2019

On Dec. 21, ABC submitted comments to the U.S. Department of Labor’s Employee Benefits Security Administration in support of its proposed rule to allow small and mid-sized businesses to band together and offer 401(k) plans to their employees through association retirement plans.

In its comment letter, ABC wrote that the DOL’s proposal will provide a vehicle for millions of hard-working Americans to save for the future through ARPs. By allowing more businesses to pool together to offer 401(k) plans, ARPs will create an attractive alternative for small employers to offer high-quality benefits to their workforce and allow them to focus their time and resources on managing the day-to-day activities of their businesses.

The proposed rule came at the direction of President Trump’s Executive Order 13847 on “Strengthening Retirement Security in America,” which ordered the U.S. secretary of labor to allow more small and mid-sized businesses to adopt multiple employer plans as a workplace retirement option.

Health Reimbursement Arrangements and Other Account-Based Group Health Plans (Proposed Rule)

On Oct. 29, the U.S. Departments of Labor, Treasury and Health and Human Services jointly published a proposed rule, Health Reimbursement Arrangements and Other Account-Based Group Health Plans, that seeks to expand the availability of affordable health insurance for hardworking Americans by increasing the usability of health reimbursement arrangements.

In December 2018, ABC submitted comments on the DOL’s proposal as a member of the Partnership for Employer-Sponsored Coverage. In the comment letter, ABC specifically urged the Department “to consider expanding the proposed classes of employees to include field employees (craft workers and laborers), whose employment often depends on the uncertain duration of a project. Distinguishing field employees from office staff would provide the flexibility necessary to increase the use of HRAs.” The proposed rule defines eight classes of employees to which an employer can offer HRAs for IHC purchase.

According to the DOL, HRAs are designed to give workers and their families greater control over their health care by providing an additional way for their employers to finance quality, affordable health insurance. If finalized, the rule would also provide opportunities for employers, especially small and mid-size employers that currently do not offer coverage or that face large administrative burdens in offering coverage, to finance individually selected health insurance on a tax-preferred basis.

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