Many of our clients have been asking about the recent executive order signed into effect by President Trump relating to healthcare. We want our clients to have the best possible information about how this executive order will affect them, and we seek to provide you with just the facts. This executive order will change some things about our healthcare system, but it will take time to implement so we need to remain calm and patient as these changes happen. The primary directive of this order is to increase competition and choice of healthcare coverage, however it also creates issues with the existing affordable care act (ACA).
One of the big positives to the executive order, is that it will make it easier for people to obtain large group coverage, which many consider to be the best insurance to have. This allows small businesses to join together to buy coverage collectively through association health plans. Association health plans are usually sponsored by trade organizations or interest groups, but this act seeks to amend the rules governing these plans so they are no longer subject to state regulation and could potentially become nationwide coverage. These nationwide plans may be subject to the same federal oversight as large employer policies – they don’t have to adhere to all of the ACA provisions. These large employer policies aren’t required to provide comprehensive benefits including: covering prescription drugs, mental health, and substance abuse.
The order also allows more consumers to purchase short-term health insurance plans and lengthen the coverage under these as well as permit renewals. These plans were designed to insure people for months between jobs or other life transitions, and were limited to 90 days previously. The short-term plans will be restored to 11 and 12 month plans giving people longer terms for coverage.
Another major change under the executive order is that it would expand employers’ ability to give workers cash to buy coverage elsewhere. Health reimbursements are not common knowledge, but they are beneficial to employers. These allow employers to provide workers with tax-free funds to pay for their health care costs, mainly deductibles and co-pays. The ACA barred employers from using HRAs to reimburse workers for premiums and other various expenses. This directs federal agencies to expand flexibility and use of these employer-funded accounts in order to give employees a wider variety of coverage choices.
The changes to our healthcare system put in place by this new executive order will definitely affect many people – people under current coverage, employers providing coverage to their workers, and those seeking new coverage. We ask that you be patient as these transitions begin to take affect and keep on top of your coverage to see just how this executive order will change your healthcare plan. As these transitions begin to come into effect we will do our best to keep you informed and explain the changes to your coverage. If you have any further questions as to how your coverage will be affected, we will do our best to answer these on a case by case basis and keep you informed to the best of our ability. You can visit our website at www.mccormickhealth.com for more information as it becomes available.