On October 12, 2017, President Trump signed an Executive Order directing various departments to consider easing some health insurance rules related to small businesses, short-term health insurance policies and Health Reimbursement Accounts (HRAs) with the stated goal of increasing consumer options for health insurance.
Last month, Republicans failed to Repeal and Replace the Affordable Care Act (ACA) through the 2017 budget reconciliation process. However, this Executive Order adds to the list of actions recently made by the Administration as part of their ongoing efforts to modify or eliminate certain parts of the ACA.
It is important to note that the Executive Order provides guidance to various agencies, but does not immediately affect any current ACA rules or regulations.
Key Highlights of the Executive Order:
- Association Health Plans (AHPs): The executive order directs the DOL to consider adopting a broader interpretation of the Employee Retirement Income Security Act (ERISA), which could potentially allow small employers in the same line of business to group together to self-insure or purchase large group health insurance.
- Short-Term, Limited Duration Insurance (STLDI): The executive order directs federal agencies to consider updating rules on short-term limited duration insurance to allow plans to last up to 12 months and be renewable. These policies are exempt from several of the ACA mandates, and currently can only be sold for periods of three months or less and cannot be renewed after a total of three months.
- Health Reimbursement Arrangements (HRAs): The Administration specifically focused on three HRA rules it wants the agencies to consider modifying: making employer HRA contributions tax deductible, allowing HRA funds to be used for premium reimbursement, and allowing HRAs to be used in conjunction with non-group coverage.
Other Recent Administrative Action on Health Care:
- Oct. 12: White House announced that it will stop making Cost-Sharing Reduction (CSR) subsidies to health insurance companies until Congress appropriates the funds for them.
- Oct. 6: The tri-agencies issued Interim Final Rules expanding exemptions from the ACA’s contraceptive coverage mandate.
- Sept. 30: Congress failed to reauthorize funding for the Children’s Health Insurance Program (CHIP).
- Aug. 31: Administration announced a 90% funding cut to ACA Marketplace advertising, in addition to cutting funding to groups that help people enroll in the Marketplace (“Navigators”) by 40%.
The CSR payment discontinuation and interim final rules on contraceptive coverage are effective immediately. Conversely, while the Executive Order directs agencies to begin modifying or creating new rules, details about potential changes will only be available once new or updated rules and guidance are released in response to it. Marshall & Sterling will keep you updated as new rules are released.
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