Top Takeaway from this week – The White House released an Executive Order that would expand access to association health plans, limited duration health insurance, and amend rules related to health reimbursement accounts.

This week, the White House released an Executive Order (EO) intended to increase access to more affordable health care coverage by directing federal agencies to issue rules related to association health plans, short-term insurance, and health reimbursement arrangements. While the EO has received a lot of attention, its impact is minimal; it will take the agencies time to draft policies, issue proposed rules and implement the ideas espoused in the EO.

Administration Action –

On Thursday, the White House released an EO intended to provide more flexibility for small employers and individuals to offer and purchase insurance exempt from many of the ACA’s coverage requirements. Press release: EO: Press releases from HHS and CMS: and

The EO directs the Departments of Labor, HHS and the Treasury to promulgate regulations that would:

  • Expand access to association health plans, “which could potentially allow American employers to form groups across state lines.” The Department of Labor could issue rules amending the Employee Retirement Income Security Act (ERISA) to reinterpret the definition of association health plans (AHP), thereby making it easier for employers to band together to offer coverage for employees that is not subject to the ACA’s regulations. Notably, the EO doesn’t envision allowing individuals to form AHPs on their own, as was initially anticipated.
  • Expand coverage through low cost short-term limited duration insurance (STLDI), which generally offer a more limited set of benefits. The Obama Administration limited access to those plans to no more than 90 days and required that plans notify consumers that the STLDI does not qualify as minimum essential coverage, however the Trump Administration may amend these regulations to allow consumers to purchase such policies for up to a year.
  • Amend rules related to Health Reimbursement Arrangements (HRAs) “so employers can make better use of them for their employees.” While the EO does not provide detail, the Administration reportedly is hoping to allow employers to make pre-tax contributions to HRAs that can then be used by employees to purchase health insurance.

In announcing the order, President Trump noted that the order will be the “first step to providing millions of Americans with Obamacare relief.” Sen. Paul (R-KY), who was at the White House for the signing, called the order the “biggest free market reform of health care in a generation.”

However, while the EO provides a framework directing the respective federal departments to take action on these three issues, the EO is expected to have little to no immediate effect on the marketplaces. The agencies will need to craft more detailed policies and issue regulations, soliciting comment from the public, before the policies are finalized and can be implemented. Employers and health plans will also need time to amend their coverage policies, or to form associations, before the full impact of this EO will impact the markets.

Many have raised concerns that allowing association health plans and short-term insurance will siphon young and healthy consumers from the ACA’s marketplaces, thus making the risk pools more expensive for insurers and those who remain.

Senate Action –

On Tuesday, Senate Finance Committee Ranking Member Wyden (D-OR) sent a letter to HHS and the Department of the Treasury requesting information on why the Administration failed to approve Oklahoma’s 1332 reinsurance waiver. Press release: Letter:

And yesterday, Sen. Donnelly (D-IN) sent a letter to CMS Administrator Verma urging the Administration to commit to providing stability to health insurance markets and working together on bipartisan solutions to reduce health care costs, expand access to care, and strengthen the health care system. Press release with text of letter: