Custom Health Option and Individual Care Expense Act; CHOICE Act
Summary
The Custom Health Option and Individual Care Expense Act (CHOICE Act) aims to amend the Internal Revenue Code of 1986 to address health reimbursement arrangements (HRAs) integrated with individual market coverage. It seeks to treat custom health option and individual care expense arrangements as meeting specific requirements under the Public Health Service Act and the Internal Revenue Code. The bill also includes provisions for employer credits related to CHOICE arrangements and allows participants to purchase exchange insurance under cafeteria plans.
Expected Effects
The CHOICE Act would allow employers to offer HRAs that can be used to reimburse employees for individual health insurance coverage or Medicare expenses. This could expand healthcare options for employees, particularly those in the individual market. Additionally, the employer credit aims to incentivize the adoption of these arrangements.
Potential Benefits
- Increased healthcare choices for employees through HRAs.
- Potential for lower healthcare costs for some individuals.
- Incentives for employers to offer health benefits.
- Simplification of rules regarding HRAs integrated with individual market coverage.
- Allows employees participating in CHOICE arrangements to purchase exchange insurance under cafeteria plans.
Potential Disadvantages
- Potential complexity in administering the new HRA rules.
- Possible shift of risk to individuals in the individual market.
- The effectiveness of the employer credit may be limited.
- Potential for adverse selection in the individual market.
- May increase the tax burden on some employers.
Constitutional Alignment
The bill primarily deals with taxation and regulation of health insurance, which falls under the purview of Congress's power to tax and spend for the general welfare, as outlined in Article I, Section 8 of the Constitution. The Commerce Clause (Article I, Section 8, Clause 3) also grants Congress the power to regulate interstate commerce, which includes health insurance markets. The bill does not appear to infringe upon any individual rights or liberties protected by the Constitution or its amendments.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).