Trump Ends ACA Exchange Stabilization Subsidies, Directs Agencies to Remove Employer Restrictions On HRAs, Increase Transparency

October 13, 2017

With Congress unable to repeal and replace the Affordable Care Act, President Trump this week took several steps to adjust the law with regulatory changes—many positive for employers—while leaving to Congress the decision on whether to continue subsidies to insurance companies participating in the ACA exchanges.  An Executive Order, which includes many regulatory components HR Policy has supported, directs his administration to expand the ability of employers and employees to use Health Reimbursement Arrangements (HRAs) for purchasing coverage in the individual market and to improve access to data on health care prices and outcomes.  The Order directs the Departments of Treasury, Labor, and Health and Human Services to reverse Obama-era restrictions on using tax-preferred HRAs for premiums used to purchase individual health care insurance.  Prior to the ACA, HRAs were used by employers who wanted to reimburse their employees' health care premium expenses rather than offer their own health care plans.  The Order also directs the administration to:

  • Improve access to data on health care prices and outcomes, while minimizing reporting burdens;
  • Expand access to Association Health Plans and short-term limited duration insurance as a lower-cost option to COBRA coverage; and
  • Promote competition in health care markets by limiting excessive consolidation and preventing abuses of market power.
The Order jump-starts the administration's ACA regulatory reform efforts related to employer-provided health care benefits.  However, any new rules will have to go through a public notice and comment period that could take up to 18 months. Meanwhile, President Trump announced he would end the ACA cost-sharing subsidies to insurance companies participating in the ACA exchanges that were ruled illegal by a federal district court, but reportedly indicated he would sign a bipartisan measure to continue them.  HR Policy has urged Congress to continue the subsidies to improve affordability in the individual market.  Senate HELP Chairman Lamar Alexander (R-TN) has been working with Ranking Member Patty Murray (D-WA) to find a bipartisan solution but it remains to be seen how viable any such measure will be in the current Congress.