Date: November 18, 2016
Now that the election is over, and with President-elect Donald Trump pledging to make significant alterations to the Affordable Care Act (ACA), the ACA’s future is very much up in the air. With Republicans controlling the White House and Congress, the door is open for huge changes to the law. At this point, it’s not clear whether those changes will include complete repeal, major overhaul or minor tweaks. Regardless, the election results leave the ACA, and perhaps other laws relating to employer-provided benefits, exposed.
To begin with, whether President-elect Trump and Congress can or will make sweeping changes to the ACA (and the timing of such changes) depends on many factors and unknowns. Those factors and unknowns raise significant and legitimate questions. For example, will all Congressional Republicans go along with the proposed changes? Will Congress be able to use the reconciliation process, if needed, to push through its agenda? Will popular provisions (such as the prohibition on pre-existing condition exclusions and coverage of dependents to age 26) remain (as the President-elect has now said he’d like to keep)? How will changes to the individual and employer mandates and state-based exchanges impact the health insurance market, the economy and the future of the health care delivery system overall? What about the approximately eight million individuals receiving a subsidy now, and the approximately 20 million that are now covered but who weren’t covered prior to the ACA? While the President-elect’s platform asks for immediate changes (including elimination of subsidies), it’s more likely that because of administrative and procedural challenges, there will be no changes for 2017.
President-elect Trump has also promised to replace the ACA, but the exact specifics of a replacement have not been spelled out. His agenda focuses on expanding consumer directed plans, including broader use (and perhaps more favorable tax treatment of) health savings accounts and flexible spending accounts. The agenda also includes allowing insurers to sell across state lines with the hope of increasing competition and decreasing premium costs. He also has suggested full individual federal tax deductions for health insurance premium payments, as well as requiring price transparency from all health care providers. It remains to be seen whether those ideas fully develop and become law.
Looking forward, President-elect Trump and Congress are poised for plenty of political maneuvering, particularly with the perception that Congressional Democrats will try and defend the ACA. Employers should be aware of the potential changes and the President-elect’s agenda, and should keep a keen ear out for developments. Of particular importance, and as a last note to employers, remember that nothing has yet actually changed: The ACA is currently in effect, and employers should comply! That means, among other things, that large employers should continue to offer affordable coverage to full-time employees and plan to report on IRS Form 1095-C for 2016 in early 2017. Plan designs should continue complying with ACA-protected mandates, such as coverage of dependents to age 26 and the prohibitions on pre-existing condition exclusions and annual/lifetime dollar limits for essential health benefits. Employers that self-insure should plan to continue to pay reinsurance contributions and PCOR fees. In other words—comply until told otherwise!
Our Benefits Compliance team will be watching as the situation develops and reporting in Compliance Corner and through other means. We will also be taking steps to work closely with our clients to monitor specific impacts and consequences. Stay tuned…!