Everything You Need to Know About President Trump’s Executive Order on ACA

Is this the beginning of the end of the Affordable Care Act?

On January 20, 2017, President Trump signed an Executive Order that targets the Affordable Care Act (ACA) by giving federal agencies the authority to begin repealing the law. However, President Trump still needs the support of Congress in order to completely repeal ACA for good. 1

First Steps Toward ACA Repeal

On January 12, 2017, the Senate passed a budget resolution by a vote of 51-48. On January 13, 2017, the House of Representatives also passed the budget resolution by a vote of 227-198. The budget resolution provides direction for Republicans to start repealing ACA, including legislation called “budget reconciliation,” which enables Congress to repeal and replace certain parts of ACA. 2

Once ACA repeal legislation is drafted, the Senate, House, and the President will have to approve it. However, if the Senate or House amend the bill, the bill will become more complicated and take longer to approve. 3

Executive Order

The Executive Order cannot repeal ACA itself – it only made repealing ACA a priority for the Trump Administration. Even though repealing ACA is a key focus of the Trump administration, the repeal will not happen quickly.

The executive order outlines two main methods that the Trump Administration could use to begin repealing ACA:
1. Writing new regulations
2. Exercising authority and discretion where allowed

1. Writing New Regulations

Regulations can be changed and new regulations can be written, but they must follow the Administrative Procedures Act, which requires notice and comment periods for proposed regulations. This process can take months or even years. 4

2. Exercising Authority and Discretion Where Allowed

Executive departments and agencies can “waive, defer, grant exemptions from, or delay the implementation of any provision or requirement” of ACA IF it would impose a “cost, fee, tax, penalty, or regulatory burden” on individuals, families, healthcare providers, and others parties (see Section 2 of the Executive Order). 5

These methods could prove faster than writing and changing regulations. However, there are a limited number of areas where current law allows executive departments and agencies much power to quickly make changes.

The Bottom Line

Think of the Executive Order as a mission statement for the Trump Administration. The Administration will focus on repealing/replacing ACA, but current law limits the extent to which they can do so. The methods for repealing ACA will take time (months or even years). So for now, ACA is still the law and employers must comply with its provisions.

We’ll keep you posted as more information becomes available!

1 How Trump’s executive order impacts future of ‘Obamacare’, Associated Press
2 Health Care Reform Update: Navigating the Road Ahead, Cigna
3 House votes to begin repealing Obamacare, Reuters
4 ACA Executive Order and Employers: The Bottom Line, International Foundation of Employee Benefit Plans
5 Executive Order 13765: Minimizing the Economic Burden of the Patient Protection and Affordable Care Act Pending Repeal

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