October 15, 2017
By Yolanda Baker – http://www.TheSmartGuideSeries.com
President Trump signed an executive order last week outlining his eventual disintegration of the PPACA, otherwise known as Obamacare. In this order, he states his administration “… will prioritize three areas for improvement in the near term: Association Health Plans (AHP’s), Short-Term, Limited-Duration Insurance (STLDI), and health reimbursement arrangements (HRAs).” The changes from these three items are the administration’s attempt to chip away at Obamacare.
In this article, I will do my best to summarize what these three items are and how this executive order won’t make any significant changes to the PPACA.
Association Health Plans
According to the Trump Administration, more access to Association Health Plans (AHP), will allow more small businesses with similar occupations to offer health insurance to their employees, hopefully lowering the costs. Also, according to the Executive Order, a company joining an AHP “cannot exclude any employee from joining the plan and cannot develop premiums based on health conditions”.
However, AHP’s already exists throughout the United States, via group plans through memberships in professional organizations or trade group. Take a look at The Hartford website concerning health insurance obtained through membership in several organizations. (https://www.thehartford.com/business-playbook/in-depth/health-insurance-professional-trade-organizations)
Short-Term, Limited Duration Insurance
Does this order really make any major changes to the current health insurance environment? Not really, states Avik Roy, Founder of The Foundation for Research on Equal Opportunity. On the PBS Newshour last Thursday, Mr. Roy explained,
“And the point about these short-term plans, all the president has done here is revert back to the rules that were in place a year ago under President Obama. It was only as the president, the last president, President Obama, was leaving office, that they restricted the length of these plans to 90 days. Before that, you could buy these plans up to 364 days.
All the president has done here is revert to those preexisting rules.”
Health Reimbursement Arrangements (HRA)
A HRA allows an employer to reimburse an employee’s eligible healthcare expenses, such as healthcare premiums and other costs not covered by insurance.
“Within 120 days of the date of this order, the Secretaries of the Treasury, Labor, and Health and Human Services shall consider proposing regulations … to increase the usability of HRAs, to expand employers’ ability to offer HRAs to their employees, and to allow HRAs to be used in conjunction with nongroup coverage.”
There’s no detail in the order that states how the availability of HRA’s will be increased.
Conditions That Delay or Stop the Executive Order from Completion
The Executive Order states that there will be a minimum of 60 days for the Secretaries of The Treasury, Labor, and Health & Human Services to begin the process of implementing the order for AHP’s and STLDI’s. It will take 120 days for the HRA part of the order to begin to change. However, there must be a written plan that lays out the rules for this order, and the public has the right to respond to the “rough draft” of the rules before it can take effect. So, the final draft of this order may take several months to enforce.
I learned something new this weekend – Executive Orders may take months to enact, and sometimes, may never begin due to legislative or judicial actions. In fact, 19 states, including California and New York, have filed a lawsuit against the President to stop him from eliminating the healthcare insurance subsidies.
My advice? Keep all this on your radar, but don’t hold your breath that it will be the end of Obamacare. I’ll do my best to keep you up to date and post relevant articles.
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