On October 12, 2017, President Donald J. Trump signed an executive order (EO) directing the Departments of Treasury, Labor and Health and Human Services (HHS) (collectively, the Agencies) to consider proposing regulations or revising guidance that would affect certain types of health insurance plans and health reimbursement arrangements (HRAs). Specifically, the EO requires the following:
- Within 60 days of the date of the EO, the Secretary of Labor must consider expanding access to association health plans (AHPs) for small employers, such as by allowing AHPs to be offered across state lines to organizations in similar industries or by allowing businesses in the same state or metropolitan area to form an AHP. Notably, the EO would require that AHPs not be allowed to exclude any employee or determine premium prices based on pre-existing conditions. AHPs would also be precluded from having annual or lifetime limits or requiring cost-sharing for preventative care services. In addition, AHPs would be required to offer coverage to dependent children up to age 26;
- Within 60 days of the date of the EO, the Secretaries of the Treasury, Labor and HHS must consider expanding the availability of short-term, limited duration insurance (STLDI); and
- Within 120 days of the date of the EO, the Secretaries of the Treasury, Labor and HHS must consider improving employees’ ability to use HRAs by, for example, allowing HRAs to reimburse the cost of health insurance premiums and allowing HRAs to be used in conjunction with non-group coverage.
It remains to be seen what effect the EO will have on the stability of the Federal and State individual health insurance exchanges.
It is important to note that the EO does not have the force of law and does not actually direct the Agencies to adopt any particular rules; instead, it merely asks them to consider expanding access to AHPs, STLDI and HRAs to the extent consistent with current law. Further, any proposed regulations put forth by the Agencies would be required to comply with the public notice and comment process required under the Administrative Procedure Act, which requires publication in the Federal Register and a public comment period.
Consequently, any changes to existing regulations or interpretations of existing regulations would not take effect for several months and would have to fit within the parameters of existing law under the Affordable Care Act (ACA). In the absence of Legislative action, it appears unlikely that the health care landscape will change too dramatically as a result of the EO.
For now, Employers should continue complying with the existing ACA rules and regulations. We will keep you apprised of any important further developments.