This morning, President Trump signed an Executive Order intended to improve access, increase choices and lower costs for healthcare. Below is a brief summary of what we know so far.
- Directs the Labor Secretary to consider regulations/guidance – within 60 days – expanding Association Health Plans, for the purpose of allowing employers in the same line of business anywhere in the country to join together in offering healthcare coverage to their employees. This potentially allows employers to form AHPs through existing organizations, or create new ones for the express purpose of offering group insurance. This could lead to the sale of insurance across state lines through AHPs; however, more action will need to be taken by the Department of Labor before this option can be available.
- Directs the secretaries of HHS, Treasury and Labor to consider regulations/guidance – within 60 days – expanding short-term limited duration insurance (STLDI), allowing them to revisit the Obama Administration rule that limited the length of STLDI plans to three months.
- Directs the secretaries of HHS, Treasury, and Labor to consider regulations/guidance – within 120 days – expanding Health Reimbursement Arrangements, allowing employers to contribute more to their employees’ HRAs, which are employer-funded accounts that reimburse employees for healthcare expenses, including deductibles and copayments. The IRS does not count funds contributed to an HRA as taxable income. The intent of this directive is to expand HRAs, which could provide employees with more flexibility in how their healthcare is financed.
- Within 180 days, the secretary of HHS, in consultation with the secretaries of Treasury, Labor and the Federal Trade Commission, must report to the president on state and federal laws, regulations and policies that limit healthcare competition and choice, as well as on actions that federal and state governments could take to increase competition and choice and reduce consolidation in healthcare markets. The EO does not direct the agencies to adopt specific regulations; therefore, in order for any policies to change, the agencies will have to adhere to standard rulemaking procedures which include public comment time and consideration.
- For 2018’s Open Enrollment, no changes are expected in the absence of regulatory action by the agencies. Until any such regulations are enacted, the ACA and all of its regulations, penalties and enforcement remain the law of the land.
We will of course closely monitor further developments and keep all our stakeholders posted regarding key updates. With our extensive experience representing association health plans, we look forward to actively working on these market expansions. Please don’t hesitate to let us know if you have questions, comments or concerns we can help you address.