Trump Takes First Administrative Step to Repeal and Replace the ACA
President Trump acted swiftly on January 20 to fulfill, at least in part, a promise he made repeatedly on the campaign trail by signing an executive order that both outlines his administration’s position on the ACA (obviously supporting full repeal) and what his directives are with respect to the ACA until it's repealed (do everything to reduce its fiscal impact on Americans).
Looking at the executive order from the perspective of how it affects the employer mandate, it’s interesting to note a few things. First, it doesn’t mention the employer mandate at all. The closest it gets to that is in its instructions to the various executive agencies in charge of the ACA (basically the Department of Health and Human Services and the Treasury) to take all steps allowed within the law to ease the fiscal burden on “purchasers of health insurance”. Second, it acknowledges the law is in effect and all agencies still must comply with it. The second point seemingly contradicts the first point, but does it? Let’s consider the reality of how the ACA was implemented and is now enforced.
Dan Diamond wrote a good overview of this in his article published by Politico which I recommend for more details. The result is this: while the ACA is the law (what you must do), HHS and, to a lesser extent, Treasury determined how the law would be implemented and enforced. Put another way – all the regulations we’ve written about over the years, discussed in webinars and face to face, dissected countless times, and so on – they weren’t the law itself. They were instructions from those two agencies (plus others as needed). All those agencies report to the President. And the new President just told them he wants those regulations changed, reinterpreted and republished to accomplish a different purpose. While at the same time, Congress works to repeal the law.
What does this mean to you with respect to the employer mandate? For now, nothing has changed. Practically speaking, the next ACA item you should be focused on is the 1095C reporting deadline of March 2, 2017. Nothing in the executive order changes this. And, it’s unlikely that any ACA regulations can change soon enough to affect that deadline. Currently, HHS and Treasury are both without senior leadership. President Trump has nominated Representative Tom Price to head HHS, and banker Steven Mnuchin to run the Treasury. It's likely both will be confirmed by the Senate, but not until mid-February. That’s when they can propose changes to existing regulations, which then must go through a public comment process before becoming final.
The next step appears to be with Congress, which is currently working on repeal legislation. The last version of repeal didn’t technically eliminate either the individual or employer mandates, but reduced the penalty for violating the mandates to $0, which accomplishes the same thing. Indeed, it seems to me the executive order signed on the 20th anticipates Congress taking such a step. “Zeroing out” the penalty for the employer mandate gives HHS and Treasury a much broader range of actions they can take in complying with the executive order. We won’t know for sure until Congress takes its next move, but it won’t be surprising to see the eventual legislation dovetail nicely with this executive order.
In summary, for now it’s business as usual with respect to the ACA. Continue your employee tracking, get your reporting done and continue offering your minimum value plans. As always, Assurance will be monitoring everything going on with respect to the ACA and keep you up to date with our analysis on the impact to your business.
- Post-Election ACA Webinar Replay
- Government Oversight on Health Plans
- ACA Easy as 1,2,3
- Compliance Support Page
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