Benefits

President Trump Has Taken Office: Here Is What You Need to Know About the ACA Developments

January 31, 2017

President Trump has been in office for less than two weeks, but he has already gotten to work on fulfilling one of his key campaign promises -- repealing and replacing the Affordable Care Act (ACA) or “Obamacare.” However, we can expect extensive delays before we see any significant changes to the ACA.

In the meantime, companies are advised to continue to comply with the ACA to avoid penalties, including “pay or play” mandate for Applicable Large Employers (ALEs) to offer ACA compliant coverage and Section 6056 reporting. Here is a look at what has happened so far:

Executive order impacting financial and regulatory burden
Hours after being sworn into office, President Trump signed an executive order that, “instructs all federal agencies to “waive, defer, grant ­exemptions from or delay” any part of the law that imposes a financial or regulatory burden on those affected by it. While the executive order alone does not repeal the ACA, one potential outcome could be the removal of the individual mandate, since that is a potential financial burden, which could make taxpayers who did not choose to sign up for coverage very happy.

However, others are viewing this order with skepticism. Robert Laszewski of Health Policy and Strategy Associates, who has been a critic of the ACA, told The Washington Post that the order is a “bomb” lobbed into an “already shaky” insurance market. Lazewski further said that, “instead of sending a signal that there’s going to be an orderly transition, they’ve sent a signal that it’s going to be a disorderly transition.” Part of this anxiety, that is being exhibited by Laszewski and others, could be due to the vague nature of this executive order.

Implementing the ACA has been challenging, and we’ve seen what has worked well and what has not. President Trump’s administration may benefit from this experience and be in a better position to roll out more effective healthcare legislation. President Trump has announced his intentions to repeal the “pay or play” requirements for large employers, but keep the ban on insurance carriers denying coverage for pre-existing conditions and the popular ACA provision that allows young adults to remain on their parent’s health plans until age 26.

Timeline for repeal and replace
Speaker Paul Ryan has suggested that portions of the ACA will be repealed by the Spring of 2017 as part of a budget reconciliation process that, while slow, will allow major legislation changes to be passed with a simple 50-vote threshold.

At the Republican retreat being held in Philadelphia, Senate Majority Leader Mitch McConnell tamped down expectations a little, emphasizing that the Senate moves more slowly than the House and it is currently doubtful that there will be bi-partisanship on this issue. 

It is not completely clear where the ACA is headed at this point, but it is evident that the current government is looking for an alternative solution. TriNet will continue to monitor the situation and keep you updated as more information becomes available.

This communication is for informational purposes only; it is not legal, tax or accounting advice; and is not an offer to sell, buy or procure insurance.

This post may contain hyperlinks to websites operated by parties other than TriNet. Such hyperlinks are provided for reference only. TriNet does not control such web sites and is not responsible for their content. Inclusion of such hyperlinks on TriNet.com does not necessarily imply any endorsement of the material on such websites or association with their operators.

By Janice Scherwitz

Janice Scherwitz is a benefits compliance analyst at TriNet.

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