HR379-119

What This Bill Does

The Healthcare Freedom and Choice Act is a targeted rule-nullification bill. It provides that the final interagency rule published at 89 Fed. Reg. 23338 on April 3, 2024 by the Internal Revenue Service, Employee Benefits Security Administration, and Department of Health and Human Services relating to short-term, limited-duration insurance and independent noncoordinated excepted benefits coverage has no force or effect. That rule changed federal limits and disclosure requirements for short-term health plans and certain excepted benefits. By voiding the rule, the bill would restore more room for short-term limited-duration insurance products and related excepted-benefit arrangements, while removing the agencies' newer consumer-protection and market-segmentation approach.

Who Benefits and How

Short-term health insurers benefit because the 2024 federal limits and disclosure framework would be voided. Insurance brokers benefit from more ability to sell short-term limited-duration products. Consumers seeking lower-premium short-term coverage benefit from broader product availability. Employers using excepted-benefit arrangements benefit from less restrictive federal treatment of independent noncoordinated coverage.

Who Bears the Burden and How

HHS insurance regulators lose the 2024 rule as an enforcement tool for short-term plans. Employee Benefits Security Administration staff must unwind guidance tied to the final rule. ACA marketplace risk pools may face adverse selection if healthier consumers choose short-term coverage. Consumers needing comprehensive benefits face risk if short-term products are sold as substitutes for ACA-compliant coverage.

Key Provisions

• Nullifies the April 3, 2024 interagency short-term insurance final rule.
• Provides that the rule has no force or effect.
• Limits IRS, EBSA, and HHS regulation of short-term limited-duration insurance by voiding that rule.
• Expands regulatory room for independent noncoordinated excepted benefits coverage.