On October 12th, President Trump signed an executive order relating to the attempt to repeal and replace the ACA. The goal of the order is to relax regulation on association health plans. Further, the order requests of various government agencies to expand the availability of short term plans and HRA’s. Ultimately, the end goal is to expand on the choices available to consumers. What does all this mean, and how will it impact you?
Association Health Plans
Association Health Plans are an already existing product on the market. Businesses can pool together as a way to purchase insurance for their employees. Because of this structure, being in an Associated Health Plan can give small employers more buying power. The ACA subjected these plans to additional regulation, including essential health benefits and premium rating restrictions. What does the order do in relation to these plans? First, it asks agencies to expand access to these plans. It could allow employers to form associations across state lines. It could also allow them to avoid certain ACA requirements. This is part of an attempt to drive down prices by increasing market competition.
Specifically, the order instructs the departments to allow common geography or industry be a factor in the creation of the associations. So, companies across the border from one another could form an association, for example. Or, a group of small manufacturers would be able to form an association in order to create a larger pool to lower their premium cost and increase their options.
Short Term Plans
The executive order further directs the government to consider lifting restrictions on short term plans. The ACA limited these plans to coverage for under 90 days. Further, it mandated that these policies could not be renewed. These policies are usually cheaper than regular health insurance. The order seeks to expand the time that a short term plan can exist. It also seeks to allow for the renewal of short term plans.
Finally, the order seeks to direct the departments to expand the use and availability of HRA’s. An HRA is an employer paid account that reimburses employees for their medical expenses. This can include deductibles and premium. The order seeks to allow the use of HRA’s with individual health plans.
What to do
For the time being, the executive order is a directive to the departments that oversee the various aspects of managing the ACA. Until these departments decide to revise their rules and regulations, there are no changes to the ACA. These renewed solutions to the order may follow it directly, or there may be other solutions. As a result, it’s hard to guess what changes will be made. However, if/when those changes occur, we’ll have a look at them. For the time being, the order gives the departments 60 days to draft new regulations for associations and short term plans. So we should see those changes by December 11th, 2017. The order gives 120 to draft changes to HRA regulations, so we should see those plans by February of 2018. As always, check back in to see what changes are coming, and if you have questions, don’t hesitate to reach out.