President Trump wasted no time on his campaign promise to take action on the Affordable Care Act. Mere hours after being sworn into office, the President signed the Executive Order titled "MINIMIZING THE ECONOMIC BURDEN OF THE PATIENT PROTECTION AND AFFORDABLE CARE ACT PENDING REPEAL."

The Executive Order is effective immediately, however, its implementation may take a number of days to actually begin taking effect. Among other things, it directs the heads of the various agencies of the Executive Branch in charge of enforcing the ACA (namely, Health and Human Services, Medicare and the Treasury) to: "exercise all authority and discretion available to them to waive, defer, grant exemptions from, or delay the implementation of any provision or requirement of the Act that would impose a fiscal burden on any State or a cost, fee, tax, penalty, or regulatory burden on individuals, families, healthcare providers, health insurers, patients, recipients of healthcare services, purchasers of health insurance, or makers of medical devices, products, or medications."

This sets the tone for the ACA's repeal, however, the Secretaries of the main agencies involved (i.e. Tom Price for HHS, of which Medicare is a part, and Steven Mnuchin for Treasury) have not yet been confirmed by the Senate. Once that happens, they’ll need to draft and publish new regulations to actually comply with this Executive Order. In the meantime, Congress is working on actual repeal legislation to be passed via a reconciliation budget bill. Details on Congress' repeal bill have not yet been released.

Interestingly, this order doesn't mention "employers" directly, but instead uses the term "purchasers of health insurance." This casts a broader net, and the ultimate effect of Section 2 of this order to eliminate taxes and penalties associated with the ACA. That most certainly could be inclusive of both the individual and employer mandates, making both of them invalid. The timing of that relief – whether it's for 2017 going forward, or retroactive to the inception of the ACA – has not yet been discussed and may have to wait for the legislative repeal from Congress.

Undoubtedly more details will be published soon, as the new Administration gets to work on its agenda. Assurance will continue to keep you posted on developments as they occur.

Information contained herein is not intended to constitute tax or legal advice and should not be used for purposes of evading or avoiding otherwise applicable regulatory responsibilities as issued by the federal or state government(s) and/or taxes owed under the Internal Revenue Code. You are encouraged to seek advice from your legal or tax advisor based on your circumstances.