by Carol Rito, VP of Product Compliance and Development
On Friday, January 20th, President Trump issued a one-page Executive Order relating to the Affordable Care Act (“ACA”). The order is basically symbolic. It is broadly drafted and gives no specifics about which aspects of the law it is targeting and has no immediate effect on employers.
The order directs the Department of Health and Human Services, other departments, and agencies, to exercise all available authority and discretion to waive, defer, grant exemptions from, or delay the implementation of any provision of the ACA 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. Employers are not among those explicitly listed as requiring protection from regulatory burdens.
The broad language gives federal agencies latitude to change, delay or waive provision of the law that they deem overly costly, essentially, dismantling of the law even before Congress moves to repeal it. However, any revisions of regulations already issued through notice-and-comment rulemaking, still requires the agencies to comply with the Administrative Procedures Act (“APA”).
Under the APA, agencies cannot rescind existing regulations until they engage in a new notice-and-comment rulemaking process, which includes required public comment periods and delayed effective dates. In other words, it makes it difficult for President Trump to overturn final regulations which have already been implemented. Only regulations that haven’t taken effect can be suspended, so the President’s chief of staff has instructed federal agencies to cease issuing new regulations and withdraw rules that have been sent to the Office of the Federal Register until they can be reviewed by the new agency heads.
From an individual perspective, while the directive gives HHS wide latitude when granting hardship exemptions from the individual mandate, it does not waive the requirement for individuals to maintain minimum essential coverage.
From an employer perspective, until further regulatory guidance is released, the final regulations implementing the employer mandate and its reporting requirements remain in effect and are subject to enforcement by the IRS. In fact, the IRS recently indicated that it intends to begin notifying employers of their potential liability for an employer shared responsibility payment for the 2015 calendar year. Employers with 50 or more full-time equivalent employees and sponsors of self-insured health plans should continue preparing to comply with the ACA’s Form 1094 and 1095 reporting requirements.
Now that President Trump has taken initial action on the ACA, it may ease the pressure on Congress to attempt an immediate repeal or find an immediate replacement.