Authors: Tiffany D. Downs, R. Brian Spring (Ford Harrison)
On 20 January 2017, President Trump signed an executive order entitled “Minimizing the Economic Burden of the Patient Protection and Affordable Care Act Pending Repeal.” The Order directs the Secretary of Health and Human Services and the heads of all other executive departments and agencies to take all action needed to waive or defer the implementation of any requirement of the Affordable Care Act (ACA) that imposes a financial or regulatory burden (e.g. on states, individuals or healthcare providers). The Order also encourages the development of a free and open market for offering interstate healthcare services and health insurance.
However, the Order does not repeal existing law and it is therefore problematic to implement. The rules relating to the ACA can only be replaced or deleted through an administrative rulemaking process. The Order also does not identify which parts of the ACA the new administration intends to eliminate. However, it says the administration may:
- make changes to the parts of the ACA that apply to different stakeholders, such as the ‘Employer Mandate’ that covers employers’ obligations;
- make changes to the fees imposed under ACA;
- allow the selling of insurance across state lines; and
- give control to the states to determine Medicaid and Child Health Insurance Program coverage.
In addition, on 13 January 2017, the US House of Representatives passed a budget resolution for tax year 2017, which was previously approved by the Senate. The budget resolution basically begins the process of repealing the ACA through the process of budget reconciliation.
Employers’ Bottom Line
The Order does not expressly repeal or delay the requirements on employers but directs the agencies to scale back on enforcement of the ACA wherever they can, while the new administration and Congress work on repealing the ACA.
Further, budget reconciliation is not a ‘magic wand,’ and full repeal of the ACA cannot be accomplished through the budget reconciliation process.
Both the House and Senate had a target date of 27 January 2017, to draft repeal legislation; however, they have failed to do so, and lawmakers have indicated the process may take more time than originally anticipated. Until such legislation is drafted and passed, the Employer Mandate is still law, and employers should continue to comply.