An Update on Executive Action on the ACA

The Patient Protection and Affordable Care Act (ACA) remains intact after several failed attempts by Congressional Republicans to repeal and replace the law. However, executive action taken throughout the month of October will result in substantive changes to various components of the ACA.

New Regulations Expand Exemptions from Contraceptive Mandate

On October 6, the Departments of Labor, the Treasury, and Health and Human Services issued final rules that offer some employers new exemptions from the ACA’s contraceptive coverage mandate. The first rule expands the availability of the exemption for employers that object to providing contraceptive coverage on religious grounds, and the second rule offers employers an additional exemption based on moral, not religious, objection.

Existing California laws require coverage of all FDA-approved methods of contraception under most employer-sponsored plans. As a result, the new regulations on the federal level will have little impact on California employers.

The President Signs an Executive Order on Health Care

President Trump signed an executive order (the Order) on October 12 with the aim of increasing insurance coverage options available to individuals and small employers. While the Order itself has no immediate effect, it directs the federal Departments of Labor, the Treasury, and Health and Human Services to consider implementing new regulations that will:

  • Make it easier for small employers to join together to purchase health insurance through association health plans;
  • Expand access for individuals to short-term, limited duration insurance, which currently fails to meet the ACA’s standard of Minimum Essential Coverage; and
  • Provide more flexibility for the use of Health Reimbursement Arrangements by employers.

White House Announces an End to some ACA Subsidies

On October 12, the White House announced its intention to end reimbursements to insurers for cost-sharing reductions provided to low-income individuals through the Exchanges. The President indicated that this decision is the result of Congress’s failure to pass an appropriation for this expense.

The impact of the White House’s decision remains unclear. Individuals will still have the opportunity to enroll in coverage through an Exchange beginning November 1, and rates for 2018 will be locked in place. However, coverage and rate changes could be significant in the long-term if Congress doesn’t pass authorization for the continuance of the cost-sharing reduction payments.

IRS Reverses Policy on Individual Mandate Compliance Certification

The Internal Revenue Service reversed its recent policy on how it will monitor compliance with the ACA’s individual mandate. Beginning with the 2018 income tax filing season, the IRS will no longer accept tax returns that fail to certify whether the taxpayer had qualifying health coverage in 2017. Electronically filed returns that fail to provide certification will be rejected, and paper forms may be suspended and any refund due to the taxpayer may be delayed. This is a departure from the IRS’s previous policy, announced in February, which allowed taxpayers to file forms without providing such certification.