President Trump signs executive order on healthcare
TAX ALERT |
On Oct.12, 2017, President Trump signed an executive order to promote healthcare choice and competition across the United States. The order indicates that the president’s intent is to facilitate the purchase of health insurance across state lines, and to develop and operate a healthcare system that provides high quality care at affordable prices for the American people.
The order was issued in response to increases in the cost of health insurance and decreases in the number of insurance companies selling health coverage to individuals on the government-run exchanges.
The Trump administration intends to prioritize three areas for improvements in the near term:
1. Association health plans (AHPs)
2. Short-term limited-duration insurance (STLDI)
3. Health reimbursement arrangements (HRAs)
The executive order requests various agencies within the federal government to consider proposing new rules or revising current rules within the next 60 to 120 days to address these three areas.
The Trump administration also intends to promote competition in healthcare markets, limit excessive consolidation throughout the healthcare system and prevent abuses of market power. Furthermore, it hopes to improve access to quality information that Americans need to make informed healthcare decisions while minimizing reporting burdens on affected plans, providers and payers.
Association Health Plans
One goal of the Trump administration is to expand access to association health plans, also known as multiple-employer welfare arrangements or MEWAs. AHPs are group health plans sponsored by an association, such as a trade association or a Chamber of Commerce. AHPs allow small employers who are members of the association to band together to provide health coverage to their employees, thus being able to offer better coverage at lower costs due to economies of scale. AHPs may be fully-insured by purchasing health insurance policies from an insurance carrier or self-insured.
Short-Term, Limited-Duration Insurance
The Trump administration also wants to expand the availability of short-term limited-duration health insurance policies. Currently, individuals buying STLDI policies receive coverage that is limited to less than three months. The executive order requests that the coverage be permitted for longer time periods, and that the policy be renewable by the individual.
Health Reimbursement Arrangements
HRAs allow employers to reimburse employees for health insurance premiums and out-of-pocket medical expenses on a tax-advantaged basis. The executive order seeks 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.
This executive order communicates the policies of the Trump administration. Now it is up to the various governmental agencies to take action in response to the executive order.