Trump Administration Orders Delay of ACA Implementation

In an executive order dated January 20, 2017, President Trump called for delayed implementation of certain provisions and requirements under the Affordable Care Act.

Practical Law Employee Benefits & Executive Compensation

President Trump, in a six-part executive order dated the day of his inauguration (January 20, 2017), has called for delayed implementation of Affordable Care Act provisions and requirements that impose a fiscal burden on varies entities and individuals listed in the order. The order is titled "Minimizing the Economic Burden of the Patient Protection and Affordable Care Act Pending Repeal."

 

Policy Approach and Substantive Provisions

The first section of the order states the new administration's policy intent to promptly repeal the Patient Protection and Affordable Care Act ( www.practicallaw.com/4-502-4287) (PPACA), as amended (ACA) (see Affordable Care Act (ACA) Overview ( www.practicallaw.com/7-502-3192) and Affordable Care Act (ACA) Toolkit ( www.practicallaw.com/9-518-2991) ). Pending repeal, the new administration intends to:

  • Take all actions consistent with law to minimize the ACA's "unwarranted economic and regulatory burdens."

  • Prepare to offer the states greater flexibility and control over the healthcare market.

The order's second section is a directive to the Secretary of the Department of Health and Human Services (HHS) and the heads of other agencies with authorities and responsibilities under the ACA (which presumably includes the Departments of Labor and Treasury) to use their full authority and discretion in waiving, deferring, granting exemptions from, or delaying implementation of any ACA provision or requirement that would impose a fiscal burden on any State or a cost, fee, tax, penalty, or regulatory burden on:

  • Individuals and families.

  • Healthcare providers, health insurers, patients, and recipients of healthcare services.

  • Purchasers of health insurance.

  • Makers of medical devices, products, or medications.

The order's second section does not expressly reference employer-sponsored group health plans or all employers (for example, plan sponsors with self-funded health plans). The second section (as with the third and fourth sections) is caveated with "[t]o the maximum extent permitted by law" language.

The order's third section directs HHS and the other executive departments to use their authority and discretion in providing greater flexibility to the states and cooperating with them to implement healthcare programs. A fourth section instructs the departments responsible for healthcare or health insurance to encourage development of a "free and open market in interstate commerce for the offering of healthcare services and health insurance."

 

Effect on Current ACA Implementing Regulations

To the extent that carrying out the order's directives requires revising regulations issued through notice-and-comment rulemaking, the departments must comply with the Administrative Procedure Act and other applicable statutes in considering or promulgating the regulatory revisions.

 

Practical Impact

Though not a full-on repeal of the ACA (a process already underway in Congress), the President's order calls into question the future of his predecessor's signature domestic achievement. Many of the order's directives appear oriented toward the ACA health insurance exchanges, however, and the order does not expressly target any of the ACA's group health plan market reforms by name (see Article, Health Insurance Exchange and Related Requirements Under the ACA ( www.practicallaw.com/4-507-2259) ).

Famously implemented (in part) through subregulatory guidance, the ACA might now be the topic of FAQ administrative guidance to scale back its reach and regulatory burden. The departments also may take the administration's invitation to revise regulations through the note-and-comment process, as needed, though that is a more time-consuming endeavor. Relatedly, another Trump administration directive imposed a freeze on sending regulations to the Office of the Federal Register until they have been reviewed by a Trump-appointed agency head. The order may also signal the departments' likely approach to ACA enforcement though, for the moment at least, and especially with regard to some of the ACA's more immediate requirements, continued compliance would seem to be advisable.

 
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