President Trump Signs Executive Order On Health Care; HHS Announces CSR Payments To Be Discontinued Immediately

by Fraser Trebilcock
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Yesterday, October 12, 2017, President Trump issued an Executive Order entitled “Promoting Healthcare Choice and Competition Across the United States” (the “Order”). Also on October 12, 2017, the Department of Health and Human Services released a statement that the cost-sharing reduction payments authorized by section 1401 of the Patient Protection and Affordable Care Act (“subsidies”) will be discontinued immediately (the “HHS Statement”).

Executive Order

The Order articles a “policy of the executive branch, to the extent consistent with law, to facilitate the purchase of insurance across State lines and the development and operation of a healthcare system that provides high-quality care at affordable prices for American people.” To meet this policy goal, President Trump announced that his administration will prioritize three areas of law in the new future: (1) Association Health Plans (“AHPs”); (2) Short-term, Limited-Duration Insurance (STLDI); and (3) Health Reimbursement Arrangements (“HRAs”).

To the extent consistent with law, the Order relevantly announces that government rules and guidelines should expand the availability of and access to PPACA insurance alternatives, including AHPs, STLDI, and HRAs. To effectuate this goal, the Order relevantly indicates:

“Sec. 2. Expanded Access to Association Health Plans. Within 60 days of the date of this order, the Secretary of Labor shall consider proposing regulations or revising guidance, consistent with law, to expand access to health coverage by allowing more employers to form AHPs. To the extent permitted by law and supported by sound policy, the Secretary should consider expanding the conditions that satisfy the commonality of-interest requirements under current Department of Labor advisory opinions interpreting the definition of an “employer” under section 3(5) of the Employee Retirement Income Security Act of 1974. The Secretary of Labor should also consider ways to promote AHP formation on the basis of common geography or industry.”

“Sec. 3. Expanded Availability of Short-Term, Limited Duration Insurance. Within 60 days of the date of this order, the Secretaries of the Treasury, Labor, and Health and Human Services shall consider proposing regulations or revising guidance, consistent with law, to expand the availability of STLDI. To the extent permitted by law and supported by sound policy, the Secretaries should consider allowing such insurance to cover longer periods and be renewed by the consumer.”

“Sec. 4. Expanded Availability and Permitted Use of Health Reimbursement Arrangements. Within 120 days of the date of this order, the Secretaries of the Treasury, Labor, and Health and Human Services shall consider proposing regulations or revising guidance, to the extent permitted by law and supported by sound policy, 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.”

At this point is time, no changes to the law have occurred; this Executive Order merely indicates the President’s intent to make changes to the current regulatory structure in the near future. A copy of the Order is available at: www.whitehouse.gov/the-press-office/2017/10/12/presidential-executive-order-promoting-healthcare-choice-and-competition

HHS Statement

The HHS Statement indicates that its decision to immediately discontinue subsidies is based on a legal opinion issued by the Attorney General. A copy of the HHS Statement and the Attorney General opinion letter are available at: www.hhs.gov/about/news/2017/10/12/trump-administration-takes-action-abide-law-constitution-discontinue-csr-payments.html

We will keep you apprised of future developments in this regard.

 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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