Trump's Executive Order and Employee Healthcare

On October 12, 2017, President Trump signed the Presidential Executive Order Promoting Healthcare Choice and Competition Across the United States. The Executive Order states there are three areas to focus on to expand access to health insurance, lower health insurance premiums and increase financing options for health insurance: 
 

1. Association Health Plans,
2. Short-Term Limited Duration Insurance and
3. Health Reimbursement Arrangements. 

It is important to realize this is an Executive Order and it does not change the current law.  It is a direction to draft rules.  Under the Administrative Procedure Act, the agencies will first have to publish proposed rules and then receive and respond to public comments before publishing the rules in final form. 

The Secretary of Labor has 60 days to consider issuing regulations expanding the availability of Association Health Plans (AHPs).  This will likely be achieved by expanding the interpretation of the definition of “employer” under ERISA.  The goal is to allow small employers to join together to form an Association to obtain insurance in the large group market.  Associations could include employers in the same line of business anywhere in the country or any employers within a single state or a multi-state metropolitan area.

The Departments of Labor, Health and Human Services and Treasury have 60 days to consider issuing regulations regarding the expansion of the availability of short term, limited-duration insurance (STLDI).  Currently, STLDI cannot exceed three months.  These policies are usually less expensive and non-ACA compliant.  The Administration is looking to extend these policies to 12 months with the potential for renewal.  This could be helpful to those in-between jobs, looking for a COBRA alternative or someone who  misses open enrollment.

The Departments of Labor, Health and Human Services and Treasury have 120 days to consider issuing regulations regarding the expansion of Health Reimbursement Arrangements (HRAs).  Currently HRAs are non-compliant Employer Payment Plans unless they are integrated with ACA compliant coverage.  There is an exception for Qualified Small Employer HRAs but due to the many administrative requirements, they have not been widely used. The Administration wants to expand the employer’s ability to offer HRAs and allow them to be used for premiums for non-group coverage.

 

IN SUMMARY

Within the next couple of months, we could see proposed regulations to:

1. Allow a broader range of employers to join together to provide health insurance for their employees through the large group health plan market;
2. More choices within the market regarding short term limited duration insurance; and
3. More options available for employers to utilize Health Reimbursement Arrangements.

We are closely monitoring these issues as they develop and will know more once draft regulations are issued.