Healthcare under Trump: Where the ACA stands now
A year and a half into Donald Trump’s presidency, the commander in chief and his administration have made a strong effort to convert on his campaign promise to alter, and even eliminate, the Affordable Care Act. We watched a political soap opera play out in 2017 as a Republican House and Senate ultimately failed to repeal the health law.
Although numerous repeal and replace efforts fell short, the ACA remains operational. Despite its survival, many notable changes to the ACA have been made:
- Several executive orders have been signed that direct agencies to lighten the burden of the ACA on individuals
- Advertising and marketing budgets were cut to undermine efforts to solidify the health marketplaces created by the ACA
- Certain cost-sharing funds were cut for insurance carriers
- The individual mandate was repealed as part of the GOP tax reform bill
- New regulations were introduced for the expansion of association healthplans and health savings accounts
These actions, which were primarily initiated by the Trump administration, have had a trickle-down effect that has triggered other attacks on the healthcare law. This includes a lawsuit joined by as many as 20 states that claims the ACA employer mandate is invalid now that the individual mandate has been repealed.
ACA employer mandate remains
As a reminder, the employer mandate requires applicable large employers to track their employees’ hours of service and determine their full-time status as defined by the regulations. For employees deemed full-time, the employer is obligated to offer the opportunity to enroll in minimum value, minimum essential coverage that is affordable. In addition, the employer needs to report these offers of coverage to their employee workforce and the IRS by using Forms 1094-C and 1095-C.
Many employers were hopeful that a Trump presidency would bring an end to the burdens of the ACA and specifically the employer mandate. However, the employer mandate remains unaffected by the administration’s efforts to dismantle the ACA. In fact, further progress of this provision continues to roll forward.
ACA penalties roll on
Over the past year, the IRS started enforcing the penalties associated with the employer mandate by using Letter 226-J to notify non-compliant employers and alert them to the estimated penalty they owe. Penalty letters associated with 2015 filings (the first year the provision went into effect) have been sent out and the IRS shows no signs of slowing down. They’re now gearing up to start sending penalty letters associated with the 2016 compliance year and beyond.
The Trump administration and other ACA adversaries will likely continue efforts to dismantle the ACA. That said, looking back on President Trump’s first year and a half in office, it’s safe to say that the majority of the ACA remains intact, with just pieces and parts being siphoned off.
ACA confusion persists
Reflecting on everything that’s transpired for healthcare, it’s no surprise that employers and even some organizations in the payroll, brokerage, and HR spaces, are confused. Some employers have accepted the ACA and are following the regulations to stay compliant. Others still think the law is going to be repealed and are taking their chances by not reporting. There are even many employers and benefits professionals who think the law was actually repealed.
Letter 226-J is helping to change this perception, and the costly fines employers are being issued for non-compliance are serving as a wake-up call. We now see our customers and partners taking the ACA reporting requirements more seriously.
Since its inception, the ACA has been an evolving and transforming mass that has impacted every aspect of healthcare, including providers, hospitals, insurance carriers, brokers and agents, Medicare, Medicaid, employers and individuals. The administration’s efforts over the past 18 months have only perpetuated the chaos. I would not expect that to change anytime soon.