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Acero Health Announces New Suite of Employer HRA Tools

Proposed Health Reimbursement Account Rule Changes to Alter Employer Health Benefits

ALEXANDRIA, Va. (November 14, 2018) – In response to recent, proposed federal rule changes, Acero Health Technologies, a leading, enterprise software solution provider, announces plans to roll out a suite of easy-to-use, employer tools to provide employees with greater choice, flexibility and cost savings when choosing health insurance.

In October 2018, the Departments of Treasury, Labor and Health and Human Services announced proposed rule changes that will dramatically alter the group health insurance model. Effective for the 2020 plan year, the new rules grant employers of all sizes the ability to introduce and fund health reimbursement arrangements (HRA) for employees who may purchase individual health insurance coverage using the HRA’s employer-funded, tax-preferred subsidies. Additionally, employers may allow unused, excess HRA funds to be used for out-of-pocket medical expenses (for example, deductibles and copays)

The new rules allow the group market to move from the defined benefit model to a defined contribution model. Because the cost of individual health coverage may be lower than the current employer subsidy for group health insurance, employees may shop for more affordable coverage that fits the employee’s specific needs.

Provided employers adhere to conditions defined in the new rules, large employers may comply with ACA employer mandates (e.g., minimum value coverage) while helping employees financially purchase individual coverage in a manner that preserves the employer’s tax advantages under a group health plan arrangement.

Employers may take the same funds currently used to subsidize employees’ group insurance and repurpose the funds into a tax-preferred employee HRA, which the employee may then use to purchase individual coverage in the open market. Should the employer allow it, employees could also use any leftover HRA funds to offset cost-sharing under the employee’s plan or roll the funds to future years. The new rules also provide employer flexibility to alter HRA contributions based on age and family size. In addition, employers have the option of maintaining a section 125 plan to allow for pre-tax employee contributions that may be used if the employer subsidy does not cover all of the individual premium costs.

“While this requires employers and employees to change how they think about health benefits,” says Alan Merchant, CEO of Acero Health Technologies, “ultimately the changes allow for more flexibility and a personalized approach for employee decision making related to health care coverage. The changes help all parties move away from a one-size-fits-all approach to health coverage while streamlining how healthcare is insured. Over time this model will help companies recognize significant administrative cost savings by simplifying the complexities of offering traditional group health insurance.”

Employers thus gain greater forecasting control and flexibility over budgets. Employees gain choice, flexibility and control over health benefit decisions.

Employees make their own decisions about how and when to use employer funds for coverage and expenses. Employee questions about coverage, provider networks and claim dispositions will be between the employee and insurer – the employer ceases to be in the middle. Cheaper premiums reduces employee costs and the employee may also have a wider range of plan choices versus the current group option(s) – especially for companies with a geographically dispersed workforce.

Acero will leverage its proven XpandCDH™ solution to process HRA transactions and reimbursement requests including premiums. Acero will couple this transactional processing solution with the new suite of participant tools and services to support employers interested in moving to a defined contribution model in 2020.

“We’re excited about leveraging our deep experience and sophisticated tools to help the industry transition to these new HRA rules”, says Alan Merchant, CEO of Acero Health Technologies. “Our software currently processes millions of transactions so we’re well prepared to support the scale necessary to support large employers who want to cost-effectively manage health reimbursement accounts to reimburse employees.”

If you’re an employer who is interested in these rule changes and would like to learn more about how our tools might help you in 2020, please e-mail our sales team.

About Acero Health Technologies
Acero Health Technologies, an innovative information technology company, offers sophisticated, transactional software solutions to health insurance issuers. Acero’s on-premise or cloud-based solutions provide issuers with the means to leverage existing systems in solving for new business and regulatory challenges. The Acero team has significant insurance and technical experience developing advanced, enterprise software solutions for benefits administrators. Acero’s PlanXpand® engine powers several technology solutions including XpandACC™, a real-time solution synchronizing benefit accumulators; XpandCDH™, a powerful tool for issuer-administered, consumer-driven health plans, and XpandHCR™ an application that helps payers calculate and reconcile federal cost-sharing subsidies. Please see www.acerohealth.com/products to learn more our offerings.

November 14, 2018