On Oct. 12, 2017, President Donald Trump signed an executive order intended to change certain rules under the Affordable Care Act (ACA). The order does not make any changes to existing regulations.

The order would relax regulations on association health plans, and also directs the Departments of Labor, Health and Human Services, and the Treasury (Departments) to consider expanding the availability of low-cost short-term, limited-duration insurance and health reimbursement arrangements (HRAs).

An executive order is a broad policy directive that directs federal agencies to consider new regulations or guidance to implement the order’s policies. As a result, the executive order’s specific impact will remain largely unclear until agencies can issue further guidance.

The intention of the executive order is to reform the U.S. health care system by expanding choices and increasing competition to bring down costs for consumers. There are three major areas referenced:

Association health plans – An existing alternative option to traditional group health insurance, where several businesses pool funds together as a way to pay for benefits or buy group health insurance for their employees. Association health plans have been subject to state insurance laws for many years. The Obama administration tightened regulation of these plans by subjecting them to additional ACA requirements, such as coverage of essential health benefits and premium rating restrictions. The order directs the Departments to draft regulations expanding access to association health plans, potentially allowing employers to form groups across state lines and avoid certain ACA insurance requirements.

Short-Term Health Insurance – The executive order also directs the Departments to consider expanding coverage through low-cost short-term, limited-duration insurance, which is not subject to the ACA’s market reform requirements.

Health Reimbursement Arrangements – The executive order directs the Departments to expand employers’ ability to offer HRAs to their employees, and to allow HRAs to be used in conjunction with individual health insurance coverage.

Refer to the attached bulletin for more detail and contact your NEEBCo representative with any questions you may have.

President Signs Executive Order Designed to Change ACA Rules