Soon after being sworn in as the 45th president of the United States, Donald Trump issued his first executive order, in which he directed federal agencies overseeing the Affordable Care Act (ACA) to “waive, defer, grant exemptions from, or delay” any part of the law that imposes a financial or regulatory burden on those affected by it. While it remains unclear exactly how this will affect the health-care system as a whole, this executive order represents intention by Trump to unravel elements of Obamacare. Employers are directly involved and impacted by changes in the insurance landscape, so it is important that they remain alert to how actions taken by the Trump administration might affect them.
Currently, Obamacare affects employers through its employer mandate, which requires that all businesses with 50 or more full-time equivalent employees provide ACA compliant coverage to at least 95% of their full-time employees and dependents up to age 26, or face paying a fee. It also requires employers to meet annual reporting obligations. There is also an individual mandate, which requires that most Americans obtain and maintain health insurance, or an exemption, each month, or be forced to pay a tax penalty.
Trump’s first executive order has been viewed as targeting the law’s individual mandate, but it is still unclear how the order will affect the employer mandate. It is hard to say what the real impacts will be until the secretaries of Health and Human Services, Treasury, and Labor, as well as the IRS commissioner are in place, as the way that they all interpret the order will make a difference. The employer mandate is enforced through strict rules surrounding reporting, and the IRS has the discretion to enforce these regulations and deadlines. If the IRS reasons that the order gives it a mandate to take actions such as waiving or granting more exemptions from the employer mandate penalties of the ACA, the burden placed on employers would be softened.
That being said, most of the ACA can only truly be undone by acts of Congress. The executive order indicates that this may occur, but until formal guidance comes about relaxing the compliance obligations placed on employers, employers should continue to comply with the ACA and its accompanying reporting requirements, with the first deadline falling on January 31, 2017. In the meantime, employers should stay tuned into the political landscape and be attentive to changes that will directly impact the workplace.