January 24, 2017
Within hours after being sworn in as President of the United States, on January 20, 2017, Donald Trump issued his first Executive Order, directing the Secretary of Health and Human Services (HHS) and others in the federal government with authorities and responsibilities under the Affordable Care Act (ACA) to take steps to undo the ACA to the "maximum extent permitted by law."
The issuance of the Executive Order comes on the heels of budget resolutions passed by both the Senate and the House of Representatives a week earlier, instructing relevant committees to produce legislation by January 27, 2017 to repeal the ACA.
Other than its timing, the Executive Order shouldn't have come as much of a surprise, given the new President's staunch opposition to the law and his campaign promise to "repeal and replace" it.
The Executive Order itself is very broad and directs HHS and other federal agencies to waive, delay or grant exemptions from ACA requirements that may impose a financial burden. Specifically, it directs HHS and other federal agencies responsible for administering the ACA to exercise all authority and discretion available to them "to the extent permitted by law" to:
There is also some indication that the Executive Order is partially aimed at eliminating or providing exemptions from the ACA's individual and employer mandates, since those requirements impose tax penalties that may impose a "fiscal burden" on individuals and employers. In addition, it is clear that the Executive Order is intended to help accomplish an idea that has been long supported by President Trump, which is to allow health insurers to sell policies across state lines in an effort to increase free market competition.
Thus, while the Executive Order doesn't make changes to the ACA or any of its existing regulations, it does serve as an effective policy statement and send a strong signal that the Trump Administration is serious about repealing the law.
The immediate impact of the Executive Order will likely be small, since the new heads of the federal agencies are not yet in place, and it will take time to implement policies, regulations and other subregulatory guidance to carry out these directives. In addition, health insurance policies for 2017 are already in place, and state law, in many cases, prohibits significant changes from being made midyear.
Notwithstanding, making changes to the ACA is a top priority for the Trump Administration. Burnham Benefits will be closely monitoring events over the coming days, weeks and months, and keep employers advised of developments as they arise. Until then, however, employers should approach this as business as usual, and continue to prepare for upcoming requirements and deadlines to ensure full compliance with the law.
For additional information regarding certain ACA replacement options being considered, please refer to this article published by Fortune, written by Director of Compliance at Burnham, Mr. Richard Asensio.
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This ACA Pathways is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel for legal advice. The information contained in this ACA Pathways includes emerging health care news from a limited perspective and does not encompass all views. The information was selected from a wide range of sources selected on the basis of their potential impact on employers and/or their employee benefit plans. For more information, please contact Burnham Benefits.