Author: Sentinel Benefits & Financial Group

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President Trump signed an Executive Order on October 12, 2017 calling upon the U.S. Departments of Health & Human Services (HHS), Treasury and Labor to consider: expanding access to Association Health Plans; updating rules on short-term limited duration health plans; and changes to the rules regulating Health Reimbursement Arrangements (HRAs). This Executive Order, along with the White House announcement that it will cease cost-sharing reduction payments and the interim final rules regarding contraceptive services, is part of the Administration’s endeavors to modify or eliminate certain parts of the Affordable Care Act (ACA).

Executive Order: Association Health Plans
The executive order directs the US Department of Labor to expand access to Association Health Plans that will allow small businesses to purchase insurance across state lines. By joining an Association Health Plan (AHP), small employers within the same type of business could purchase plans collectively that would follow large group rules and would not fall under small group market rules. Currently, AHPs must follow community rating rules, cannot exclude any employee from participating and are prohibited from determining premiums based upon health status. These limitations could change as a result of the Executive Order.

Executive Order: Short-Term, Limited Duration Insurance (STLDI)
The Departments of Labor, HHS and Treasury are directed to consider ways of expanding coverage through low-cost STLDI.  These STLDI plans could last as long as 12 months and be renewable. These plans are not subject to ACA rules, including offering Essential Health Benefits, prohibiting annual limits and offering coverage for pre-existing conditions.

Executive Order: Health Reimbursement Arrangements (HRAs)
The executive order directs federal agencies to consider changes to the rules regulating HRAs, including allowing HRAs to be used for premium reimbursement, and allowing use of HRA funds for non-group coverage.

Cost Sharing Reduction (CSR) Payments
On October 12, 2017, the White House announced that it will no longer make cost-sharing reduction (CSR) payments to insurance companies, effective immediately. This decision primarily impacts insurers who will no longer be reimbursed for CSRs but are required to offer them to eligible enrollees in Marketplace plans.

Expanded Exemption from Covering Contraceptive Services
On October 6, 2017, interim final rules were issued to expand the current exemption for contraception coverage under employee benefit plans.  Effective immediately, employers with religious or moral objectives are no longer required to provide coverage for contraceptive services.

Affordable Care Act compliance is required unless official guidance is issued.  The CSR payment discontinuation and the interim final rule on contraception coverage are effective immediately. The changes due to the Executive Order will not occur until federal agencies write and adopt regulations implementing them.  The process includes a period of extended review and public comments and could take months. The order will probably not affect insurance coverage in 2018, but could lead to major changes in 2019.

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